Use losetup rather than -o loop

Use losetup rather than -o loop

If the device we're given is actually a file, rather than just mounting
it with the -o loop option, we'll explicitely losetup it to a device,
and losetup -d (detach) it at the end. This allows us to do more actions
on the target device (for example partition it, if needed).

Reviewed-by: iustinp