To paraphrase. You have a rope, tied at both ends, but it has slack, which you want to remove some of but also desire that there not be a loose loop that flops around.

Do you have any problem with using an additional item to tie up the loose segment?
Another piece of rope.
Or putting two loops in and adding a bungie in between. (that's lame now that I think about it)

Sounds like a cable managment problem.
How about something like a zip or a twist tie. You could use a single strand of solid conductor house wire.

Bingo, I've seen Velcro cable wraps at the hardware store. Get a bag full and use them to wrap the loose loope of rope against the main strand.

PS. A sheepshank, is that the same as what some call a truckers hitch?