Weird edge looping, can't find the problem

Ok si i have ran into this problem a few times in the passed, and it was usually caused but faces inside the mesh or something like that.

http://www.pasteall.org/pic/show.php?id=27632

http://www.pasteall.org/pic/show.php?id=27633
.blend
But i see know problem with the mesh and all the verts are connected with reasonable topo.

Any reason for this happening ?

~Wentzel

The loop tool does not like non manifold edges(in vertex or edge mode Select / Non Manifold menu to show them). Select the horizontal bars in the windows and P / separate them. You can always add them back afterwards with Ctrl+J