Windows XP stucked in loop after service pack 3 (SP3) installation-It restarts again and again. Please advice.

This is a common problem which occurred with initial releases of SP3. There can be two solution :

1. Revert back and uninstall SP3 and download latest SP3 from internet. Then again install.

2. Basically there is a GDI32.dll file under windows/system32
You need to replace with files which can be found under
/windows/servicepackfiles/i386/GDI32.dll

You can replace it by running recovery console or by using some linux LIVE Cds

Hope that helps