Arduopter loiter issues on octocopter

Hey guys i have an issue with my newly built octo, whenever I switch to loiter it cuts throttle and falls like a rock whist still leveling.

I need to know why it is behaving like this and how to fix it if anyone knows, i will also link the KMZ and log file, but from my looking at the logs, it appears as though it thinks it is very high up even though its bouncing along the ground.

When i was near the ground and switched to loiter, it first throttled down to minimum throttle then slowly sped up before suddenly rocketing into the sky.

2013-05-31 11-23 80.kmz

2013-05-31 11-23 80.log

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