First off I am rooting off of a Win 7 x64 system. The trick seems to be to have the right driver loaded for the actual recover as well as some other things. One thing I noticed about adding this:
%SingleAdbInterface% = USB_Install, USB\VID_0BB4&PID_0C9E
%CompositeAdbInterface% = USB_Install, USB\VID_0BB4&PID_0C9E&MI_01
%SingleBootLoaderInterface% = USB_Install, USB\VID_0BB4&PID_0C94
to the android_winusb.inf file in the usb_driver folder of your sdk is the only way I could get it to install was by going the PID to that matching my device which is not 09CE, it happens to be 0FF9. In recovery your computer seems to use a default usb mass storage driver which has to be uninstalled then directed towards the folder in your Android SDK folder named usb_drivers. The driver if installed correctly should be named Android ADB Interface while in recovery, not USB Mass Storage Device.
After I got the right driver installed it still did not work I was using the loop.bat method and kept getting the "error:no device found" method and having been working this for days. I bought about 4 different sd cards and tried them all. The only way I got a card to work is if I formatted the card in a FAT32 format with the allocation size set to 4096. I used the default quick format setting. After I got the right message from running the loop.bat and rooting successfully the card no longer worked after being in the device through a full boot into Android. So reformatting may be the trick here. The drivers in fastboot and bootloader do not seem to affect the outcome for me, Only the drivers in recovery and the card itself being formatted. After that everything else was easy. After you have the correct drivers and have formatted the SD Card then you can run adb shell in a loop and reboot the device into recovery and it should give you the correct message, not the "error:no device found" one. I believe that if you can get both the drivers installed and the right formatted sdcard by chance it will happen for you. Let me know if you need anymore specific information on the tweaks I did as I was one of the people who was about to give up hope because I tried everything possible even downgrading and updating again.
I was using a PNY 2GB class 4 card when I was successful but it was the first one I formatted under FAT32 at 4096 allocation size if that helps anyone.