Yup
Yeah, you need a little cassette tape splicer, I actually have one that works ok, it has the (sticky) tape to tape the ends together after you cut the (cassette) tape with the special diagonal blade, then it has special paralell blades to cut off the excess tape. I'd check radio shack for one of these gems.
Then comes the fun part, getting the tape to sit nice in the tape shell and screw it back together. Make sure it's going through all the right places so the tape head and capstan and what not can do their magic. I would not suggest a loop longer than say 10 inches, and obviously if it's too short you won't be able to get it back in the cassette shell. I never tried just putting the naked tape into the machine without the shell and trying to play that, I imagine it would be a mess, but you could try. Experiment with cheap tape machines. Have fun.
Can anyone tell me how to do playback or recording loops with tape (either reel or casette)?