I suspect that the problem might be the fact that RadAjaxLoadingPanel does not show the default loading images unless a valid skin is set to it. In our live examples however skins are set through a global skin manager. That is why the loading panel still shows even though the loading panel markup does not set a skin. But if you copy-paste the markup in a new project where skin manager does not set a valid skin, the loading panel will not show.
Based on the above I would suggest that you set the Skin attribute of the loading panel to one of the valid built in skins and verify whether the problems still exists (you can reference the updated video of the previous post).
the Telerik team
If you want to get updates on new releases, tips and tricks and sneak peeks at our product labs directly from the developers working on the RadControls for ASP.NET AJAX, subscribe to their blog feed