Some Zaurus ROMs don't automatically have a bunch of extra loop devices available. The good news is that it's not hard to add new ones. Open embeddedkonsole and become root then use the following command to show the available loop devices:
ls -l /dev/loop*
If you only see /dev/loop0 and /dev/loop1 that's most likely the problem. Use the following command to create more loop devices:
mknod /dev/loopx b 7 x
where x is the next loop device number. So to create /dev/loop2 the command would be:
mknod /dev/loop2 b 7 2
You can have up to 8 loop devices (loop0 - loop7). Note that any devices you create this way will stick around until the next reboot - then you'll have to create them again.