It seems that you all live to make my life more difficult than it already is. XD
However, I did find the solution after some research, it's a little complicated, so pay attention, in other words watch and learn from the master. ;p
Prime Material Dragon and Nurse Reficule's effects are both continuous and cancel each other out. The effect that resolves LAST in this "infinite" loop will win the situation. It all depends on what type of effect is played, in other words, it depends on which effect is triggered first. I'll give you two examples with cards you know:
1. Gift Card: Gift Card's effect is a healing effect, increasing your opponent's Life Points by 3000. Healing triggers Nurse Reficule's effect, turning healing into damage, next Prime Material Dragon kicks in, turning the damage into healing. So in this situation, your opponent would gain 3000 Life Points and Prime Material "wins" the loop.
2. Just Desserts: This cards gives 500 points of damage for every monster he/she controls. Being a damaging effect, it will first trigger Prime Material Dragon, increasing his/her Life Points by 500 for each of his monsters, followed by Nurse Reficule's effect, turning the increase into a decrease. Here Nurse Reficule "wins" the infinite loop.
(Note: There are discussion of whether these kinds of "Infinite Loops" are considered as infinite in Duel Monsters.)
So in a nutshell: SabakuNoGaara loses 1500 Life Points when Just Desserts is activated.