As you expected, a cyclical import was not caught and results in a loop of the following output:

2013-02-20 06:54:43:665 edu.illinois.ncsa.daffodil.dsom.Import Info [Imported Schema Namespace: http://stepSchema.com from location file:/home/jchab/NGF/dfdl/daffodil-test/target/scala-2.9.2/debug-classes/edu/illinois/ncsa/daffodil/section06/namespaces/cycle_step.dfdl.xsd.]
2013-02-20 06:54:43:701 edu.illinois.ncsa.daffodil.dsom.Import Info [Imported Schema Namespace: http://baseSchema.com from location file:/home/jchab/NGF/dfdl/daffodil-test/target/scala-2.9.2/debug-classes/edu/illinois/ncsa/daffodil/section06/namespaces/cycle_base.dfdl.xsd.]
2013-02-20 06:54:43:736 edu.illinois.ncsa.daffodil.dsom.Import Info [Imported Schema Namespace: http://stepSchema.com from location file:/home/jchab/NGF/dfdl/daffodil-test/target/scala-2.9.2/debug-classes/edu/illinois/ncsa/daffodil/section06/namespaces/cycle_step.dfdl.xsd.]
2013-02-20 06:54:43:766 edu.illinois.ncsa.daffodil.dsom.Import Info [Imported Schema Namespace: http://baseSchema.com from location file:/home/jchab/NGF/dfdl/daffodil-test/target/scala-2.9.2/debug-classes/edu/illinois/ncsa/daffodil/section06/namespaces/cycle_base.dfdl.xsd.]
2013-02-20 06:54:43:800 edu.illinois.ncsa.daffodil.dsom.Import Info [Imported Schema Namespace: http://stepSchema.com from location file:/home/jchab/NGF/dfdl/daffodil-test/target/scala-2.9.2/debug-classes/edu/illinois/ncsa/daffodil/section06/namespaces/cycle_step.dfdl.xsd.]
2013-02-20 06:54:43:828 edu.illinois.ncsa.daffodil.dsom.Import Info [Imported Schema Namespace: http://baseSchema.com from location file:/home/jchab/NGF/dfdl/daffodil-test/target/scala-2.9.2/debug-classes/edu/illinois/ncsa/daffodil/section06/namespaces/cycle_base.dfdl.xsd.]

etc....

The schemas are
daffodil-test/src/test/resources/edu/illinois/ncsa/daffodil/section06/namespaces/cycle_base.dfdl.xsd
daffodil-test/src/test/resources/edu/illinois/ncsa/daffodil/section06/namespaces/cycle_step.dfdl.xsd

and the test (multifile_cyclical) is found in:
daffodil-test/src/test/resources/edu/illinois/ncsa/daffodil/section06/namespaces/namespaces.tdml