yes a loop will stretch it out all crazy style, all you need to do is take it out of the loop, put your hand on either side of the fabric and sorta move your hands like they are shuffling feet if that makes any sense. Also use some woolite in your sink, wash the item by hand and let it dry, that will get the fabric to bounce back in place.

i need a loom...badly. and remember, the tigher you have the fabric the more even yoru stitches are going to be :D I know its a pain in the ass....and you have the weird circly thing, but trust me it goes away, ask Darryl, his was stretched out all crazy style and washed it by hand for him and now its all happy looking :D