Mine does the same thing with only Diamond Twister. I redownloaded it three times. No difference. Nonstop install loop that cannot be broken. Rebooting the iPhone does not work to break the cycle. However, putting the phone into the undocumented Recovery Mode Does break the cycle, but you have to wait two hours while iTunes reinstalls all systems software and then recovers one of your designated backups. Then you have to manually reinstall apps to keep Diamond Twister from reinstalling. Turn off auto sync! I spent at least 8 hours going through every possibility before finding the recovery mode.
Recovery mode is reached by doing the following:
http://support.apple.com/kb/HT1808
If not working either, try holding sleep and power buttons until the iPhone goes dark, then release the power button and hold the sleep button down for another ten seconds.