What you are seeing is by design. The event structure waits until the loop completes because it's waiting for the loop to generate data on the wires coming out of the loop, and that doesn't happen until the loop ends. If you want to be able to read the Stop button while you're inside this inner while loop you have to uncheck the "Lock front panel until the event case for this event completes" option when configuring the event. Right-click on the event case and select "Edit events handled by this case...". You will see that checkbox at the bottom of the dialog.
That, of course, is the "quick fix". The proper fix is to not do it the way you're doing it. You should not have a long process inside of an event structure. If you're going to do something like that, you should set up a producer-consumer architecture.
Also, you may want to consider acting on the MouseUp or ValueChange event rather than the MouseDown. This allows someone to "change their mind".
