I had this same error. The problem was that the server was taking “www.example.com” and truncating to “example.com” (no “www”). But in the mysql database the wp_options for “home” was set to “http://www.example.com/blog” (with the www). So wordpress was seeing that they didn’t agree and recursively was redirecting.
There would be a simple fix in wordpress to ignore the difference of the “www.” prefix. It already does a lot checks. I changed the home option in mysql and viola. no more redirects ad infinitum.
Update: I found a trac bug that describes it. http://trac.wordpress.org/ticket/5306
