Hi,
I've encountered the same problem yesterday: my N800 was booting every 3 seconds. I've tried multiple re-flashes: no hope until I've found a solution by googling: enabling RD mode and setting the 'no-lifeguard-reset' flag. After this, I've been able to reboot normally.
Well, I wasn't aware of the busybox upgrade problem, but that's true that, as I was using RedPill mode, I've upgraded to busybox.xxx.sdk2, and today I've re-upgraded to busybox.xxx.sdk3 but the N800 is stil working well, no reboot: is this new release (ie. .sdk3) supposed to fix the problem?
Anyway, after having read this thread, I suppose that I shouldn't have downloaded and installed busybox update, right? I think I'm going to reflash tomorrow to uninstall the upgrade