I wonder if it's a similar problem to the one VB reported in an earlier thread here?
Possible, but a misconfiguration is far more likely. My first guess is to agree with Simon: it's probably broken mod_rewrite rules. Those will cause no end of havoc if you're not careful, and redirect loops look exactly like this.
Like they say, "The great thing about mod_rewrite is it gives you all the configurability and flexibility of Sendmail. The downside to mod_rewrite is that it gives you all the configurability and flexibility of Sendmail.'' (Brian Behlendorf, Apache Group)
Truer words were never spoken.
Anyway, failing that, my second guess is a broken or unfinished web application installer. That would explain the /install/ directory with no malice required.
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