The loophole revolves around age and not necessarily staying all four years in college. The rule (for North Americans) is that they're no longer draft eligible if they're 21.
The slight difference was before 2004, NCAA players had to wait an extra year to enter the draft in order to maintain their amateur status. So Van Ryn (and also Gionta) were 19 when we drafted them in 1999. Van Ryn played his draft+1 season with Michigan, and then transferred to the OHL as an overager for his draft+2 season. So the loophole was that he was already 21 by 2000 Draft, so he wasn't required to re-enter and thus would be a free agent. (Loophole also that teams only hold the rights to CHL guys for a couple years, but had indefinite rights for NCAA guys until they graduated or left school)
Van Ryn wasn't even the first one to use that loophole; 1997 2nd rounder Ben Clymer had used it the previous year to get a decent deal with Tampa. It just became known as the Van Ryn loophole because Lou put up a big fight and it went to arbitration.
A few other players used it for leverage. Mike Comrie also played at Michigan then played in the WHL and ended up getting a big ELC with the Oilers. Comically, a few years later Comrie and the Oilers were having contract issues again and he requested a trade. Eventually the Oilers agreed to a deal with Anaheim, but it was contingent on Comrie paying back 2.5 million in bonuses that he had earned from his ELC. Comrie balked at that demand so Edmonton GM Kevin Lowe cancelled the deal. Eventually Comrie would be shipped to Philadelphia for prospect Jeff Woywitka and a late 2004 1st round pick. The package that Anaheim was offering? Prospect Corey Perry and a 2004 1st round pick which ended up being 10th overall.
So nowadays everybody can get drafted at 18, so most players would have to stay four years in college in order to use the loophole. But not all players start the NCAA at 18. Justin Schultz played his draft+1 year in the BCHL, then played three years in Wisconsin to use the loophole. Miles Wood didn't join BC until his draft+2 season, so he could have used the loophole after his sophomore season.
But yeah, I've also harbored resentment towards Van Ryn. I sat through Eli Manning refusing to sign with the Chargers which over time I could understand since the ownership was a bit of a gong show at that point. But I always found it ironic that Van Ryn's arbitration was happening simultaneously to the Devils winning the Cup in 2000. If he had played his cards differently, he could have been on the 2003 Cup team. Instead he played in 9 playoff games in his NHL career.
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