loop device in FC4

[kona <kona skyhighway com>]

I can no longer use the /dev/loop? devices since the release of FC4.
When I try to run losetup, I get

	# /sbin/losetup /dev/loop0 testfile
	testfile: Permission denied

When I run strace, I see the following

	open("testfile", O_RDWR|O_LARGEFILE)    = -1 EACCES (Permission denied)

The permissions on testfile are 666.

Any ideas? It works fine on FC3 and FC4-test3.