So, if you are like me and usually access your WordPress admin Dashboard by going to /wp-admin/, then you probably also have troubles with login not working. Mine stopped working with the latest version install (3.2.1).
What happens is /wp-admin/ redirects to wp-login.php with a bunch of parameters, the last one being “reauth=1”. If you look closely, you’ll notice that there’s also a redirect_to parameter, which should look like yoursite.com/wp-admin/. If you have your WordPress installed in a subdirectory, and not in the webroot, this redirect_to parameter might be set incorrectly. Thus – continuous loop from wp-login.php to /wp-admin/, and /wp-admin/ can not be found.
One way to get rid of this is to login from wp-login.php page directly. The other one is to tweak some WP settings. I’ll update the post once I know exactly what needs to be updated and where.
A helpful WP post on how to troubleshoot login issues: http://codex.wordpress.org/Login_Trouble