I encountered this using MO 1.2.18 and LOOT v0.7.0 Beta 4. I have MO installed to Program Files (x86) and LOOT installed to Program Files (x86)/Steam/Steamapps/common/skyrim. I'm running Windows 7 and have UAC disabled on my PC. Adding the --single-process flag solved the problem for me. Thanks for the tip pStyl3!