I'm having the same problem. I click a corpse and the blue selection aura disappears. A few times I've been able to loot if I click really really really extremely fast. what I do to get around it is I wait a few days for the bodies to disappear first then I click away to loot the stuff on the ground. But even then you have to keep clicking, and you got to move your picker upper character around the loot some times to try new positions. Did you try reinstalling. Be sure to protect your saves and character folder if you try that though. Also did you patch. I can't get any of the patches to work my self. It says it can't locate any TOEE. So I think I must have deleted an important dill or some thing. once this problem seriously gets on my nerve I'll reinstall but right now waiting for the corpses to disappear after waiting 2 days usually works fine for me. Don't get me wrong though its seriously ticking me off too.
I had this same problem. Here is how I get around it... I also could not loot during normal operation. However, you CAN loot while in combat mode. What you do is pick a character, move them over close to the body to loot, and then hit "C". This will begin combat, even though nothing is there to fight. Then you click on the body, which will allow you to loot through it. Rinse and repeat. Annoying to manage, but at least it is better than having to wait around for the bodies to disappear. Big Wolf Daddy