It may be the best answer is to change the question. Why do people measure LOC? Because they're trying to measure the productivity of programmers. Why are they doing that? Largely to decide how to reward them. So that is the ultimate problem. But it goes away if the programmers work in smaller groups, in the form of startups, because then the market decides how to reward them.

So odd as may seem, the answer to the question of how to measure LOC is: startups!