It seems that alt-left clicking on an item when the loot window is open (which happens occasionally when disenchanting lots of items due to blizzards autoloot bug) causes the selected item to be swapped with the characters currently equipped item.

This is a MAJOR problem - I already lost an item before noticing my item was swapped.

Fixed with 85fb499

I'm aware of this, and is warned in the description on WoWInterface.com.
At this time and any forseeable future, this cannot be fixed due to the limits of addons.