One: if you're still awake, go to sleep! 1:20 in the morning is too early/late to keep struggling with something like this.
Come back to it when you're caught up on your sleep.
Two: Your cable is too long for this project...notice that the pattern calls for a 16" cable? You can still use this set of needles, though -- take a look at the videos on the video page for Magic Loop. If you don't have enough cable to do Magic Loop, you can also use a Modified Magic Loop with just one of the loops on the right hand side. (You'll definitely want to place a stitch marker at the beginning of your row and keep slipping it from needle to needle when you come to it.)
Hope that helps!