Sorry to hear it. I can only guess what could of happened to the poor loach.
I'm probably going off topic here, but one thing that doesn't get discussed enough is loach proving your tank so that loaches are less likely to get injured or killed.
Loach caves and hidey holes are potentially dangerous. Holes need to be big enough so that loaches don't get stuck in them. There must also be no sharp burrs in the holes so that they don't cause scrapes. There also needs to be a maximum capacity law passed for loach caves and hidey holes.

We need fish that will enforce that law too.

You just can't trust loaches these days.
Can a loach suffocate or gets injured while in the middle of a loach pile? Yes.
Who decides how many loaches can fit in a hole before it becomes overcrowded? We do.
Some things I do-
I try to keep PVC pipe no longer than 6-8" inches long.
I'll also drill some holes in the pipe or cave so that water can circulate in it better. Water in a cave or pipe can probably get funky if too many loaches are in it.
Also if I do drill holes, then I'll also need to remove any burrs that that the drill bit created or else the loaches will get scratched up on it.