Roli,
I tested this myself. What I found is that the front panel did not redraw while loading, probably because the User Interface was tied up with the Window that indicated load progress, but I can't be sure. However, what I found is that the loop still ran, and accumulated time. Instead of just displaying a count, I also displayed a delta time. Had the loop stopped running, the delta time would have jumped, while the loop count stayed the same.
Based on this information, you should rethink the problem you are having, and what you need to do to solve it. Remember, the code is still executing, it appears, but the front panel is not updated while loading a VI.
If you need front panel updates, then I would suggest loading in steps. Try just loadi
ng the VI into memory, and call the front panel later on. There are a number of solutions to this general problem, and probably a few for your specific problem.
Good luck