Is any of the splines broken? Meaning is any spline actually two splines?
You might try not using the selection manager if the two co-planar splines are in different sketches.
Try using a boundary surface instead.
Make sure none of the splines overlaps where they intersect.
The "can't knit" error doesn't make sense based on what you've said, at least not to me.
Examine the poles of the loft to see if the preview appears to overlap itself.
Try to apply "normal to profile" end conditions to see if you can give it more shape on the sides, and eliminate whatever condition is creating the area.
If nothing else works, try backing the splines off of the intersection point on both ends.
Best of luck.
If things doesn't work after trying what Matt has suggested, put the part here for some testing/checking.
Turned out that I used the the Lofted Boss/Base, I should have used Lofted Surface in stead. Works like a champ now. Next time I will post a question instead of killing myself for hours. Thanks to all of you.