In the process of converting the .xs file to .c, lots of #line directives are introduced to allow the debugger to know the original source of the lines of code directly copied from the XS. It is possible that gdb is getting confused by these, or xsubpp may have got confused and emitted the wrong lines - you could try stripping out all the lines in the .c file starting #line and recompiling, which might allow gdb to do a better job.
First though it is worth confirming that your program is actually sitting in the infinite loop; you might consider printing a dot and then sleeping a second within the loop, or alternatively you could try to force an error for gdb to catch, for example by dereferencing a null pointer:
char c = *(char*)0;
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