We ran into a similar issue as the OP from this post: https://protect724.arcsight.com/message/29380#29380
This was happening while trying to install the software logger (version 126.96.36.19984.0) for the first time on a fresh installation of RHEL. It was causing the installer to get stuck in the "Initialization" phase, specifically in the post_logger_install.sh script where it was waiting for the arcsight_logger service to write that it had successfully started-up to a file that was being checked by the is_server_up.sh script. It was at this point where the infinite loop was occurring - post_logger_install.sh checks that file to see if acrsight_logger started up successfully, sleeps for 5 seconds, checks it again, and so on. From the user's perspective it just looked like the installer had hung on something, but the arcsight_logger service has actually written the exception to the logger_server.out.log file.
The /etc/localtime and /etc/sysconfig/clock on our RHEL installation was configured as just "GMT". For some reason the arcsight_logger service doesn't know what to do with this setting or there's some other bug, but the bottom line is that the post_logger_install.sh script in the Arcsight Installer doesn't handle the ungraceful crash of the arcsight_logger service.
To resolve this issue, we simply changed the /etc/localtime to a non-GMT timezone since this server was actually in the GMT/GMT0 timezone (we changed it to Europe/London and made the corresponding change to /etc/sysconfig/clock).
Hope this helps,