In your first post you said that you are using "play music from resource", in your second you talk about magicam stopping music "on a reserved channel". XAudio2 knows music and sound - music is played directly (and parallel to the sound channels) and sound can be played on channels. And only for the latter you may reserve channels. Also, music is never chached, while you have full control over caching sound. If it is music you are using, then it might be that room transitions block access to the harddisc and because of music not being cached, it can't be played during that time.
I assume you're using exactly one XAudio-object set to "global". Try playing the loops as wav via channels and set a high cache value plus using "cache file" or "cache directory". Other than that, there is only the way of fixing (if it is a bug) magicam.
Sorry, as always I could have been a little more clear -w-;
What I meant was I used to play music by doing exactly what you mentioned above, but that caused Magicam to pause the music during transitions. Due to this, I resorted to using "Play Music From Resource". That fixed the transition problem, but now there's a pause between loops. But yes, I think the only way to fix this is through Magicam. I've contacted Linkman so we'll see if something can be done.
Edit: Actually, Lucid, your idea works...for the most part I'll have to mess with it a bit but I think it'll do.