I was shown the method of forming the loop, after applying the dubbing back around 1979. Although it was for a different effect than what Dave was after.

It was shown to me as a simpler method of achieving a tight, segmented, dubbed body ala Polly Rosborough. You applied the dubbing to the thread tightly as you would for a smooth body, then formed the loop and twisted it tight. When wrapped it gave a segmented effect. You could then rough it up to make it "buggier", while maintaining the segmentation.