It's not an intelligence explosion if humans are kept in the loop.
There is no "loop", there are many loops, some of which humans have already been eliminated from - through the conventional process of automation.
Humans being in some of the loops does not necessarily even slow things down very much - if the other loops are permitted to whir around at full speed.
In my essay on the topic I cite increasingly infrequent periodic code reviews as an example of how human influence on designing the next generation of dominant creatures could fade away gradually, without causing very much slow-down. That sort of thing might result in a "slightly muffled" explosion, but it would still be an explosion.
Anna Salamon and I have finished a draft of "Intelligence Explosion: Evidence and Import", under peer review for The Singularity Hypothesis: A Scientific and Philosophical Assessment (forthcoming from Springer).
Your comments are most welcome.
Edit: As of 3/31/2012, the link above now points to a preprint.