I haven't tried it yet, but from the citation at the end of your post it seems workable and useable, if potentially pitfall-full.

Having also need to do this my workaround was to use the toram cheat (effectively caching the entire disk)... thus no danger of blocked X-processes etc... but this was essentially a hardware solution (requiring me to install more RAM) and now that the new RAM is installed, having a low-resource way to do this (at least the lower runlevels) will be useful.

Another workaround has been to stop booting before the any /dev/cloops are allocated...
load just the things I need, etc, into ramdisk, eject the CD, burn one, and then continue booting. No X that way either, of course, and also less elegant than suspending
the device

Having a few more spare cloop devices than just eight would help too