ADDITIONAL COMMENT: My approach to this was to construct a differentiable family of geodesic rays emanating from the singularity. Once I have this, then it is straightforward using Jacobi fields to show that this family must be naturally isomorphic to the standard unit sphere. Then using what Jost and Karcher call "almost linear coordinates", it is easy to construct a C^1 co-ordinate chart on a neighborhood of the singularity. (Read the paper. Nothing in it is hard.)
But I was unable to build this family of geodesics without the "no small geodesic loop" assumption. To me this is an overly strong assumption that is essentially equivalent to assuming in advance that that differentiable family of geodesics exists. So I find our result to be totally unsatisfying. I don't see why this assumption should be necessary, and I still believe there should be an easy way to show this. Or there should be a counterexample.
I have to say, however, that I am pretty sure that I did consult one or two pretty distinguished Riemannian geometers and they were not able to provide any useful insight into this.

