Try deleting your game data folder (not save data) and then download the patches again. You may have gotten a partial file from the 1.07 update and your system thinks it already has it so it reboots.
Deleting your game data works. The problem there is that you have to redownload ALL of the previous updates. Do you have a HDD upgrade? I had the same problem with 1.06 after I upgraded to a 500 gig drive. I'm also having the same issues with 1.07. Deleting save data works, but this shouldn't be happening.