The loop will shag the engine because its not built for it [...] Its a function of the oil system on the engine amongst other things
Could you expand on this a little? Is the oil pump not capable of pumping the oil 20 cm or so into 4G or am I reading this incorrectly?
You won't die doing either of those manoeuvres properly in a PA38.
Fixed that for you.
The problem of course is when you fail to do them properly. In both manoeuvres you might end up nose-down, approaching Vne and needing way too much up elevator to recover from the dive, overstressing the airframe, engine mount, you name it. If you roll at the same time those forces are increased at the wing roots, leading to bent wings or worse.
Aerobatic aircraft have sufficient strength in reserve to survive most wrongly executed manoeuvres, and that's why you should be practicing aeros in an aircraft certified for them. Rumour has it that the Concorde, the 707 and a few more airliners have been looped and/or barrel-rolled. But this was not done by novice aerobatics pilots.