arXiv:2610.41825v1 Announce Type: new Abstract: A looped language model applies one block of layers 4 times per token and keeps a key/value (KV) plane for each loop. We study where storage error changes the next-token distribution and how shared-weight error accumulates, using Ouro-1.4B (4 loops) on GSM8K and MATH and Huginn-0125 (32 loops) on GSM8K-derived chains, with dense, simulated quantization. Per unit of error, values carry 94% of the diagonal Fisher mass, but measured KL is dominated by keys with larger quantization errors. Local second-order prediction follows the measured KL of typical sequences, including 136 held-out chains, but misses a few confident rows, and a local second-order factor for shared weights at 32 loops ranges from 1.65 (INT8) to 4.09 (INT4), so it depends on the error direction. A cell-level allocator lowers one-step KL at 25-48% of BF16 bytes, while paired task-accuracy comparisons depend on budget and the 25% gap against K4V2 shrinks to near zero under a post hoc answer-extraction check. A later Ouro-2.6B test retains the key/value split but falsifies measured-cost allocation's advantage over Fisher at 31%; across all 21 ledger registrations, 60 of 176 criteria failed.