Well, did a short (surrendered on May 25th) game as Allied against eskuche with house rule not to use Loops.
Mostly demonstrated that the Allies have no way to respond to Japanese advance in South Pacific, and India and Australia. These areas are virtually all taken before the Allies have the ability to move troops to garrison or enough CV's to challenge landings.
Without the Australia Loop it takes the US to long to move troops by sea to have any effect on stopping Australia from being overrun. I can't of course "see" the situation on the Japanese side but based on the movements they never had a problem producing enough oil to keep most of their navy and air active during the first six months or provide enough Landing Craft for any invasions they needed to support or cut off Allied defenses.
First the problem of command sea.
Of course the US doesn't have enough carriers to take on the Japanese fleet head on. Historically they just picked away at the fringes. But in the game there are no maintenance issues or oil shortages for the Japanese. They can produce enough oilers to keep their six CV's continuously at sea. This gives them the ability to gobble up islands in the South Pacific by blockade and unopposed landings. If the US response to break the blockades then the combination of 6 CV's, land based air, and BB's will take it out.
They are able to dominate the air in the South Pacific because of the ease of taking the major Islands (and their VP). All were taken if just a few turns.
The US can't attempt to snip at the edges of the less important islands because they apparently have almost no intel on Japanese movements. Only during the first month or so when the CV's were in Rabual did I have knowledge of there location. For the rest of 42 they disappeared except when they attacked my fleets. I thought the game would favor the US on "knowing" where the enemy is but apparently as long as their CV's stay at sea they are invisible.
This lead to a second major problem. Transporting troops.
By May 1st when the US gets its first transport, the Japanese have taken Naumea and Fiji (by Jan 18th). This gives them air coverage of the South Pacific and bases to support their fleets. Without the Loop the US has to put together either large escort fleets or run the transported unit along the bottom edge of the map. With nothing blocking them it takes 3 turns to get o Sydney. With even minor blocking or threat to intercept it takes 4-5 turns to cross. That means the first reinforcement can't reach Sydney until April 26th or later. The second division reinforcement can't even start until Mar 29th with an arrival around May 25th or later. That is to long for Australian units to hold out.
India probably can hold out by just putting everything to defend Bombay and watch the rest of India be overrun. Every attempt I mad to slow the advance just resulted in the Japanese army size units killing the Indian divisions. They rarely retreated. The problem with this is India is the only UK country capable of producing enough infantry to fight the Japanese. Losing their population bases will take them out of the war for all practical purposes. And, if the Japanese get air bases close enough to the Indian trade routes they can start killing off the UK merchant fleet.
So I suspect the first year of the war under version 2 using no Loops is still badly broken.
Here is a screen shot of the situation in Australia May 10th. I committed the US fleets to try to reverse the situation. That just got the US fleet sunk. The next turn they had enough Landing Craft to make landings along the entire southern coast of Australia. Surrounding Sydney and blockading everything. Only one US division made it to Australia. The rest are stuck in New Zealand. The only thing that actually slows the Japanese down is weather. I guess if there are enough heavy rain turns the Allies might do better.
