I'd like to reopen discussion on this topic. I am having this problem with Pages, only, it's just one of my documents, and it's happening on my PC while logged into the iCloud online, as well as my iPad.
The message I am receiving on my PC is slightly different. It says "We've updated Pages for iCloud! There are great new features. We'll reload the app so you can check them out." Then it attempts to reload the document, and spits out the exact same message ad infinitum. On the iPad, it does what this orginal post says. Tries to tell me to update the software, but then doesn't offer any new version of Pages, just tells me to open the app, and of course, I get the same message. Another infinite loop.
I also tried to send a copy, download a copy, duplicate it...everything I could think of to save the document, but they all failed. It's as if the document is locked away and there's no way to bring it back from the crypt. If there is some backdoor way to retrieve it, that's most likely the only way, unless some update is actually in the works, and I've only got to download it, but it appears this is not the case.
Thanks for your attention, hope there's a solution.