Try removing index.html as an index. It seems that it is simply picking up / as index.html because theoretically / is "index.html" so I'm thinking if you remove index.html from the index list it might work? I know it defeats the logic probably but meh, it's worth a try right?
It works under apache, but when switched to litespeed, it loops. I had to rewrite the entire batch under mod_rewrite rules, but this need to be looked into in case this hits other people for this issue as well.
This is on the 4.1b2 version, since I have to use this one for the upload progress bug fix for it.