What, exactly, happens if the investigator loses the combat check against the Dunwich Horror and is unable to flee or win, but doesn't get devoured, go insane or unconscious etc.? (For instance: the Horror only makes the Investigator lose all items he/she has.)

Several options come into mind, but I haven't been able to come up with a definitive answer that didn't require some interpretation on my part based on the Dunwich Horror rules and the rules of combat.

The rules for the Dunwich Horror state:

"--, every time an investigator enters combat against the Dunwich Horror, that player shuffles the Dunwich Horror deck and draws a card from it. The drawn card indicates the creature's abilities and most of its combat statistics -- The drawn card is used for the duration of the combat, and is discarded only after the Dunwich Horror is defeated, the investigator is defeated, or the investigator escapes from the combat."   

 According to combat rules, if the Investigator is still there (aka. not insane aso.) after failing the combat check and surviving the combat damage, he has an option of either fleeing or fighting. But if the card that determines the Horror's statistics does not change, it's possible the investigator is stuck in a loop, if he also has no hope of winning the combat check on another try, and if for some reason he can't evade either (eg. Yibb-Tstll is the AO and an Environment card with -1 to Sneak checks is in play). 

(A loop of this kind can happen with other monsters as well if they don't deal regular combat damage, or if the investigator soaks the damage like Michael McGlenn. Is there an official or even a "semi-official" ruling on what to do when the game gets stuck in a loop?)

It's also possible that the investigator is doomed, and in a particularly nasty way. One of the DH cards forces him to take 1 Madness card upon a failure. So he'd keep drawing them until he finally draws another copy and is devoured. But what about Rita Young in a similar situation? She'd keep on drawing Madnesses until the deck ran out because duplicate copies don't affect her due to her special ability. Now she's walking around with every insanity in the book. Talk about a basket case. Time to retire...

One way of solving this without the loop would be if the investigator draws another DH card whenever he makes a combat check against it. That would be interpreting that the investigator has been "defeated" once he loses the first combat check, but in that case the rule about discarding the DH card after the investigator escapes from the combat would be redundant. (see above)

The way I see it, having the investigator get stuck in a loop would be to what following the rules rigorously would lead. And then it plays out, even if it could have some ridiculous side effects (such as drawing all the Madness cards in the case of Rita) until it no longer has any additional effect and then it's just a question of what to do with such infinite loops anyway. (Luckily, the DH mutates turn from turn and eventually the unable-to-flee investigator would face combat damage that would lead to his demise or hospitalization, instead of forever doing futile battle in the Sentinel Hill.)

Any thoughts on this would be appreciated. Also if I've overlooked something in the rules, in the FAQ or if I've misunderstood the situation, please correct me.

This has been brought up before but no official answer has been given.  How you want to handle it is up to you until such time.

Personally, I like the idea of a 2nd card being drawn and skipping the Horror check.

Can't think of anything official about such situations off-hand, but in that situation, once I realized there was a potentially infinite loop happening, I'd draw a new DH card and use the new attack, the DH is smart enough to realize that if its attack isn't working, it should try something else.

 Why would you not be able to evade the Dunwich Horror? After all it's awareness is +1!

but for some reason you can't (Sunny and Clear) I would draw a another DH card.

Yeah I can't see why you wouldn't be able to sneak except in one extreme example. It does kind of fit in with the Lovecraft theme though. Being doomed forever to be locked in futile battle against the Dunwhich Horror.

MrsGamura said:

There are some scenarios where monsters and teh investigator lock in battle.  The monster can't defeat you and you can't escape.  It's rare but possible.

I thought the Horror had a +2 awareness? I mean, that makes it even harder, but still.

I had known this rules problem existed but had dismissed it for a long time because it did feel kind of improbable the investigator couldn't escape.

And then, of course, it happened.

Sunny and Clear and Yibb-Tstll as the Ancient One (an extra success required for the Evade roll) made it impossible for a character with 0 Sneak even against +2 Awareness. And all the clue tokens had been spent on the unsuccesful attack.