After upgrading to WordPress 3.4 category URLs stopped working.
When browsing to address (with Chrome and Firefox) one gets This webpage has a redirect loop. I have looked through the changelog of 3.4 and tried to search the web for workarounds with no luck.
The permalink settings I’m running are:
Don’t upgrade to 3.4 if you’re running “.” as category base, because your categories will stop working.
After changing back to an earlier version of WordPress it started working again.
This issue was fixed in WordPress 3.4.1 (http://wordpress.org/news/2012/06/wordpress-3-4-1/).