The most reliable fix to the recursion problem that I can think of is to implement a hard resource limit, whereby if you spend (say) 9500 of 10000 processing units on analysis, then you drop the analysis and implement a dumb strategy with whatever juice you have left. Probably wouldn't take much more than a simple counter being incremented in a bottom-level loop somewhere, as long as you're looking at your opponent's source through a level of indirection rather than just jumping straight into it. Some analysis strategies might also converge on a solution rather than finding an exact one, although this would be easier and more reliable with behavioral than with source analysis.

However, trapdoors like this are exploitable: they give agents an incentive to nearly but not quite run out the clock before making a decision, in hopes that their opponents will give up and fall back on the simple and stupid. The game theory surrounding this seems to have PD-like characteristics in its own right, so it may just have pushed the relevant game-theoretical decisions up to the metagame.