Encrypted loopback filesystem

["Michael S. Peek" <peek@tiem.utk.edu>]

Hi gurus,

I thought I would experiment with creating an encrypted loopback 
filesystem.  I've generated a file of random numbers, but I can't attack 
it to /dev/loop0:

# losetup -e serpent /dev/loop0 $(pwd)/file.bin
Password:
ioctl: LOOP_SET_STATUS: Invalid argument

I did a quick google search, but what I've found refers to making sure 
that you have the modules and util-linux installed, and I 've got those 
(using Debian/Etch), and the loop and serpent modules are loaded.

What else can I check for?

Thanks for your help,

Michael