Dmistifyer, it is not the firs time that I read some similar argumentation about the classical variables of LQG, and I don´t see the poin in them, so it would be good go to the actual equations and see where is the errata.
I am using the equations such as they appear in the classical report paper of Thieman from October of 2002 on Arxiv:gr-qc/0210094. I once tried to read the original Astekhar paper and I recognize that it seems to follow diferent (long and obscure) paths, but I assume that in the end the results would be equivalente
Well, let's go with eqs. I don't describee the ADM formalism as I gues you are familiar with it. Well, the two basic variables of LQG are (see page 22 of the article):
A_\alpha ^j = \Gamma_\alpha ^j + \betha K_a_be^b_j
Where, as expected, A is the "gauge" field, \Gamma is the spin connection and e is the 3-d vielbein (the "spatial" part of the folliation in the ADM formalism). All of them are clearly local quantities.
The only "suspectious" quantity could be the K. What is it?
The article doesn´t preciselly says it in that point, but if we go to page 19 we find that he uses K to denote the extrinsic curvature of the ADM mechanism so I guess it is just that, and so, once again, a local quantitie.
The other basic variable is:
E^\alpha_j=\sqrt(det(q))e^\alpha_j/ \beta
These is the "field" (in analogy with the electromagnetic tensor field) part of the gravity. q is the thre dimensional metric and, once egain, e is the vielbein asociated with that metric. All of them are local quantities.
The betha factor in both equations is the famous inmirizi parameter, wich, beeing a number is of course a local quantitie.
So, where are ther nonlocalities in the classical LQG variables?
Also I have readed an slighly diferent argumentation. That you can´t make these change of vraibles form ADM ones to AStekhar ones globally. I don´t know why and i don´t see an obvious reason in these definition to think so, but of course it can easilly be my fault.
These is about the classical part. Later in the LQG formalism these fields must become operators. And following the usual way in constructive field theory in order to make them well defined they are smeared. But that is not especific of LQG and it would apply equally to the constructive ("rigurous") version of the self interacting klein gordon field. And i never have seem a claim that K-G is a nonlocal theory ;).
And if we go further in the LQG canonical formalism we find that teh hilber space is defined in terms of holonomies (wilson loops) of the fields. Well, holonomies are nonlocal quantities undoubtly. But on one hand we have that Willson loops are an standard tecnique in latice QCD and i never have seem a claim that QCD is non local. Ad anyway, that would be the quantum part of the theory, not the classical.
Sorry if I am focousing in too elementary aspects, but i guess that the claim of nonlocalities were preciselly against these basic facts.
About the need of background invariance i would post somtime later if I find time and nobody else do it.
Hope that the Latex code would be o.k. because i have not time to revise it just now if it wouldn´t. If it is wrong any moderator can feel totally free to correct it if he whises.