I guess I fiexed it :~) -- well kinda,
My biggest mistake was that I wanted to use Scott. I created another table as system and then ran SQL*Loader as system and it works fine. While I am VERY happy I figured it out on my own, I am sure there is a lot more to it.
I will really appreciate all your feedback and also- how do I fix the problem with password file?
I wonder if this is how you guys learned ORACLE (make one mistake while fixing another in an infinite loop :~)