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loon (n.1)

large diving bird (especially the Great Northern Diver), 1630s, apparently an alteration of loom in this sense, which is from a Scandinavian source (compare Norwegian lom, from Old Norse lomr "loon").

loon (n.2)

mid-15c., lowen, louen "rascal, worthless person, boor," of uncertain origin, perhaps from Middle Dutch or Middle Low German; compare Dutch loen "stupid person" (16c.). The modern sense "crazy person" is by influence of loony.

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Definitions of loon from WordNet

loon (n.)
a worthless lazy fellow;
loon (n.)
large somewhat primitive fish-eating diving bird of the northern hemisphere having webbed feet placed far back; related to the grebes;
Synonyms: diver
loon (n.)
a person with confused ideas; incapable of serious thought;
Synonyms: addle-head / addlehead / birdbrain
From wordnet.princeton.edu