To reproduce follow the steps:
1. Create new project in Unity
2. Close and Restart Unity to project selection window
3. Delete folder project from disk (while Unity is in project selection state)
4. Switch back to Unity and open the project
5. Unity continues to load project and goes into notifications loop in loading project layout

Result on 5.3.3p2: "Failed to load layout - this can happen if layout contains custom windows..."
Result 5.4b8: "Please move project folder somewhere readable and writable"

Repro video:
http://screencast.com/t/RGaiUcoam

Reproduced in 5.3.3p2, 5.3.0f4, 5.2.3p2

5.4.0b8: Not readable or writable.