What does "has been loathe to fully distance itself from" mean?

The following sentence I read from Huff Post: "Why Egypt Matters: The Implications Of The Protests" gets me quite confused. I've made the key problem boldface. Hope someone can explain to me the position of the Obama administration and what the boldface part means.

The Obama administration -- from Joe Biden, who refused to call Mubarak a dictator, to Obama himself, who emphasized Egypt's role as an ally -- has been loathe to fully distance itself from Mubarak, and finds itself in a difficult position, reports theAtlantic.

The original link of the article: http://www.huffingtonpost.com/2011/01/29/why-egypt-matters_n_815863.html#s232358&title=Strong_US_Ally

Omitting the phrase set off in em dashes, the sentence becomes:

The Obama administration has been loathe to fully distance itself from Mubarak.

It uses loathe in this sense:

loath, or loth; also loathe, adj. : characterized by unwillingness to do something contrary to one's tastes, likes, sympathies, or ways of thinking

It means that the Obama administration has been unwilling to separate itself and U.S. interests from former Egyptian President Mubarak, a long-time U.S. ally.

Note that while loath (or, as Tim Lymington notes, loth) is likely the more common form to use in this context, you can make the case for loathe as well:

loathe, tr. v. : to feel strong aversion for : have extreme disgust at

In this sense, the Obama administration would be averse to breaking ties with Mubarak.