Hm. My drawing tools suck (the darned thing is crashing

) and I'm having trouble coming up with a drawing. Let's see if I can talk you through it.
Think of the hang-on-loop as being a single line of tubing starting in the tank, going over the edge, down to the pump, back up over the edge and back down into the tank. At this point, divide that length into three segments. Segment one is the part leading from the intake nozzle to the edge of the tank. Segment two goes from the edge of the tank, down to the pump, and back up to the edge of the tank. Segment three goes from the edge of the tank through to the spray nozzle in the tank. There are no siphon breaks in a closed loop and both ends should be under water when on the tank.
When you first set up the pump, you can only easily prime segment two. Segments one and three tend to drain when the loop is being rehung on the tank. When the loop is first put on the tank, all of the openings are submerged and segments one and three are filled with air. The pump starts and segment three quickly burps it's air into the tank while the air that was in segment one heads for the pump. As long as segment one is sufficiently small compared to the distance between the edge of the tank and the pump, that bubble will get pulled through and pumped out the other side.
The important bit is the size of the bubble in segment one. If there's enough air trapped in segment one that you can't get a clean siphon started on the intake side before the bubble gets to the pump, the loop won't start by itself. If the pump is located below the tank, however, this is very unlikely. Also, I've seen irrigation syringes with short hoses used to prime the closed loop while it was hanging on the tank (which allows you to prime the whole circuit). Push the hose up into segment one and pull the air from the top of that siphon. You won't get all of it, but the miniscule bubble that remains won't cause you any problems.
Your question went to the power-off failure mode. Well, since there are no siphon breaks needed or desired in a closed circuit, the loop should remain fully primed, and all three segments will remain full of water. Some of the products that you might put on the output may helpfully include a siphon break, which just means that segment three would drain while the power was off. When the power turned back on, that bubble would get pushed back into the tank and off you go again. If you do decide to put a siphon break on segment one, that too will drain into the tank, but only to the level of the tank. This is at most an inch and a half below the edge of the tank which should be very easy to restart.
Now, this design assumes that the closed loop pump is placed below the tank, or at least below the surface of the water in the tank (perhaps the pump is resting on the same stand as the tank). This approach means that the static pressure is working in your favor and helps the system self-prime. I have seen one case where someone tried to put the whole pump and closed loop in the hood above the tank, but he was never able to get it to work well. As you said, during a power loss, the thing drained itself back into the tank and was unable to restart on restoration of power.
I hope that was clear enough. If not, I'll work on a drawing and see if I can't come up with something.
Regards,
Ross