diff --git a/src/hooks/ralph-loop/index.test.ts b/src/hooks/ralph-loop/index.test.ts
index cf48ec9..cbc53e2 100644
--- a/src/hooks/ralph-loop/index.test.ts
+++ b/src/hooks/ralph-loop/index.test.ts
@@ -423,5 +423,162 @@ describe("ralph-loop", () => {
       expect(promptCalls[0].text).toContain("Create a calculator app")
       expect(promptCalls[0].text).toContain("<promise>CALCULATOR_DONE</promise>")
     })
+
+    test("should clear loop state on user abort (MessageAbortedError)", async () => {
+      // #given - active loop
+      const hook = createRalphLoopHook(createMockPluginInput())
+      hook.startLoop("session-123", "Build something")
+      expect(hook.getState()).not.toBeNull()
+
+      // #when - user aborts (Ctrl+C)
+      await hook.event({
+        event: {
+          type: "session.error",
+          properties: {
+            sessionID: "session-123",
+            error: { name: "MessageAbortedError", message: "User aborted" },
+          },
+        },
+      })
+
+      // #then - loop state should be cleared immediately
+      expect(hook.getState()).toBeNull()
+    })
+
+    test("should NOT set recovery mode on user abort", async () => {
+      // #given - active loop
+      const hook = createRalphLoopHook(createMockPluginInput())
+      hook.startLoop("session-123", "Build something")
+
+      // #when - user aborts (Ctrl+C)
+      await hook.event({
+        event: {
+          type: "session.error",
+          properties: {
+            sessionID: "session-123",
+            error: { name: "MessageAbortedError" },
+          },
+        },
+      })
+
+      // Start a new loop
+      hook.startLoop("session-123", "New task")
+
+      // #when - session goes idle immediately (should work, no recovery mode)
+      await hook.event({
+        event: { type: "session.idle", properties: { sessionID: "session-123" } },
+      })
+
+      // #then - continuation should be injected (not blocked by recovery)
+      expect(promptCalls.length).toBe(1)
+    })
+
+    test("should only check LAST assistant message for completion", async () => {
+      // #given - multiple assistant messages, only first has completion promise
+      mockSessionMessages = [
+        { info: { role: "user" }, parts: [{ type: "text", text: "Start task" }] },
+        { info: { role: "assistant" }, parts: [{ type: "text", text: "I'll work on it. <promise>DONE</promise>" }] },
+        { info: { role: "user" }, parts: [{ type: "text", text: "Continue" }] },
+        { info: { role: "assistant" }, parts: [{ type: "text", text: "Working on more features..." }] },
+      ]
+      const hook = createRalphLoopHook(createMockPluginInput(), {
+        getTranscriptPath: () => join(TEST_DIR, "nonexistent.jsonl"),
+      })
+      hook.startLoop("session-123", "Build something", { completionPromise: "DONE" })
+
+      // #when - session goes idle
+      await hook.event({
+        event: { type: "session.idle", properties: { sessionID: "session-123" } },
+      })
+
+      // #then - loop should continue (last message has no completion promise)
+      expect(promptCalls.length).toBe(1)
+      expect(hook.getState()?.iteration).toBe(2)
+    })
+
+    test("should detect completion only in LAST assistant message", async () => {
+      // #given - last assistant message has completion promise
+      mockSessionMessages = [
+        { info: { role: "user" }, parts: [{ type: "text", text: "Start task" }] },
+        { info: { role: "assistant" }, parts: [{ type: "text", text: "Starting work..." }] },
+        { info: { role: "user" }, parts: [{ type: "text", text: "Continue" }] },
+        { info: { role: "assistant" }, parts: [{ type: "text", text: "Task complete! <promise>DONE</promise>" }] },
+      ]
+      const hook = createRalphLoopHook(createMockPluginInput(), {
+        getTranscriptPath: () => join(TEST_DIR, "nonexistent.jsonl"),
+      })
+      hook.startLoop("session-123", "Build something", { completionPromise: "DONE" })
+
+      // #when - session goes idle
+      await hook.event({
+        event: { type: "session.idle", properties: { sessionID: "session-123" } },
+      })
+
+      // #then - loop should complete (last message has completion promise)
+      expect(promptCalls.length).toBe(0)
+      expect(toastCalls.some((t) => t.title === "Ralph Loop Complete!")).toBe(true)
+      expect(hook.getState()).toBeNull()
+    })
+
+    test("should check transcript BEFORE API to optimize performance", async () => {
+      // #given - transcript has completion promise
+      const transcriptPath = join(TEST_DIR, "transcript.jsonl")
+      writeFileSync(transcriptPath, JSON.stringify({ content: "<promise>DONE</promise>" }))
+      mockSessionMessages = [
+        { info: { role: "assistant" }, parts: [{ type: "text", text: "No promise here" }] },
+      ]
+      const hook = createRalphLoopHook(createMockPluginInput(), {
+        getTranscriptPath: () => transcriptPath,
+      })
+      hook.startLoop("session-123", "Build something", { completionPromise: "DONE" })
+
+      // #when - session goes idle
+      await hook.event({
+        event: { type: "session.idle", properties: { sessionID: "session-123" } },
+      })
+
+      // #then - should complete via transcript (API not called when transcript succeeds)
+      expect(promptCalls.length).toBe(0)
+      expect(hook.getState()).toBeNull()
+      // API should NOT be called since transcript found completion
+      expect(messagesCalls.length).toBe(0)
+    })
+  })
+
+  describe("API timeout protection", () => {
+    test("should not hang when session.messages() times out", async () => {
+      // #given - slow API that takes longer than timeout
+      const slowMock = {
+        ...createMockPluginInput(),
+        client: {
+          ...createMockPluginInput().client,
+          session: {
+            ...createMockPluginInput().client.session,
+            messages: async () => {
+              // Simulate slow API (would hang without timeout)
+              await new Promise((resolve) => setTimeout(resolve, 10000))
+              return { data: [] }
+            },
+          },
+        },
+      }
+      const hook = createRalphLoopHook(slowMock as any, {
+        getTranscriptPath: () => join(TEST_DIR, "nonexistent.jsonl"),
+        apiTimeout: 100, // 100ms timeout for test
+      })
+      hook.startLoop("session-123", "Build something")
+
+      // #when - session goes idle (API will timeout)
+      const startTime = Date.now()
+      await hook.event({
+        event: { type: "session.idle", properties: { sessionID: "session-123" } },
+      })
+      const elapsed = Date.now() - startTime
+
+      // #then - should complete within timeout + buffer (not hang for 10s)
+      expect(elapsed).toBeLessThan(500)
+      // #then - loop should continue (API timeout = no completion detected)
+      expect(promptCalls.length).toBe(1)
+    })
   })
 })
diff --git a/src/hooks/ralph-loop/index.ts b/src/hooks/ralph-loop/index.ts
index dc1a500..8804abe 100644
--- a/src/hooks/ralph-loop/index.ts
+++ b/src/hooks/ralph-loop/index.ts
@@ -53,6 +53,8 @@ export interface RalphLoopHook {
   getState: () => RalphLoopState | null
 }
 
+const DEFAULT_API_TIMEOUT = 3000
+
 export function createRalphLoopHook(
   ctx: PluginInput,
   options?: RalphLoopOptions
@@ -61,6 +63,7 @@ export function createRalphLoopHook(
   const config = options?.config
   const stateDir = config?.state_dir
   const getTranscriptPath = options?.getTranscriptPath ?? getDefaultTranscriptPath
+  const apiTimeout = options?.apiTimeout ?? DEFAULT_API_TIMEOUT
 
   function getSessionState(sessionID: string): SessionState {
     let state = sessions.get(sessionID)
@@ -97,32 +100,34 @@ export function createRalphLoopHook(
     promise: string
   ): Promise<boolean> {
     try {
-      const response = await ctx.client.session.messages({
-        path: { id: sessionID },
-        query: { directory: ctx.directory },
-      })
+      const response = await Promise.race([
+        ctx.client.session.messages({
+          path: { id: sessionID },
+          query: { directory: ctx.directory },
+        }),
+        new Promise<never>((_, reject) =>
+          setTimeout(() => reject(new Error("API timeout")), apiTimeout)
+        ),
+      ])
 
       const messages = (response as { data?: unknown[] }).data ?? []
-
       if (!Array.isArray(messages)) return false
 
+      const assistantMessages = (messages as OpenCodeSessionMessage[]).filter(
+        (msg) => msg.info?.role === "assistant"
+      )
+      const lastAssistant = assistantMessages[assistantMessages.length - 1]
+      if (!lastAssistant?.parts) return false
+
       const pattern = new RegExp(`<promise>\\s*${escapeRegex(promise)}\\s*</promise>`, "is")
+      const responseText = lastAssistant.parts
+        .filter((p) => p.type === "text")
+        .map((p) => p.text ?? "")
+        .join("\n")
 
-      for (const msg of messages as OpenCodeSessionMessage[]) {
-        if (msg.info?.role !== "assistant") continue
-
-        for (const part of msg.parts || []) {
-          if (part.type === "text" && part.text) {
-            if (pattern.test(part.text)) {
-              return true
-            }
-          }
-        }
-      }
-
-      return false
+      return pattern.test(responseText)
     } catch (err) {
-      log(`[${HOOK_NAME}] Failed to fetch session messages`, { sessionID, error: String(err) })
+      log(`[${HOOK_NAME}] Session messages check failed`, { sessionID, error: String(err) })
       return false
     }
   }
@@ -197,20 +202,19 @@ export function createRalphLoopHook(
         return
       }
 
-      const completionDetectedViaApi = await detectCompletionInSessionMessages(
-        sessionID,
-        state.completion_promise
-      )
-
       const transcriptPath = getTranscriptPath(sessionID)
       const completionDetectedViaTranscript = detectCompletionPromise(transcriptPath, state.completion_promise)
 
-      if (completionDetectedViaApi || completionDetectedViaTranscript) {
+      const completionDetectedViaApi = completionDetectedViaTranscript
+        ? false
+        : await detectCompletionInSessionMessages(sessionID, state.completion_promise)
+
+      if (completionDetectedViaTranscript || completionDetectedViaApi) {
         log(`[${HOOK_NAME}] Completion detected!`, {
           sessionID,
           iteration: state.iteration,
           promise: state.completion_promise,
-          detectedVia: completionDetectedViaApi ? "session_messages_api" : "transcript_file",
+          detectedVia: completionDetectedViaTranscript ? "transcript_file" : "session_messages_api",
         })
         clearState(ctx.directory, stateDir)
 
@@ -308,6 +312,20 @@ export function createRalphLoopHook(
 
     if (event.type === "session.error") {
       const sessionID = props?.sessionID as string | undefined
+      const error = props?.error as { name?: string } | undefined
+
+      if (error?.name === "MessageAbortedError") {
+        if (sessionID) {
+          const state = readState(ctx.directory, stateDir)
+          if (state?.session_id === sessionID) {
+            clearState(ctx.directory, stateDir)
+            log(`[${HOOK_NAME}] User aborted, loop cleared`, { sessionID })
+          }
+          sessions.delete(sessionID)
+        }
+        return
+      }
+
       if (sessionID) {
         const sessionState = getSessionState(sessionID)
         sessionState.isRecovering = true
diff --git a/src/hooks/ralph-loop/types.ts b/src/hooks/ralph-loop/types.ts
index 08a3ccd..7ec6df7 100644
--- a/src/hooks/ralph-loop/types.ts
+++ b/src/hooks/ralph-loop/types.ts
@@ -13,4 +13,5 @@ export interface RalphLoopState {
 export interface RalphLoopOptions {
   config?: RalphLoopConfig
   getTranscriptPath?: (sessionId: string) => string
+  apiTimeout?: number
 }