So at least some of the time the loop seems to perform as it should.... perhaps there is a source of interference that is overloading the radio during the day...TV sets? computers? CF light bulbs?
Another possibility (not sure of your location) is that you might be close to a station like WTCM 580 kHz (which operates at 50KW during the day but
only 1.1 KW at night)... The strong daytime lobe of this station is aimed NE from Traverse city. The 50 KW signal could cause problems at the low end of the broadcast band, if you are close.
http://www.fcc.gov/fcc-bin/amq?list=0&facid=70524
jr