OK two things then:
First you will have to create a custom show for the first slide and another for the rest of the slides. Otherwise the whole show will loop not just the first slide.

There's more on this on our site
http://www.pptalchemy.co.uk/PowerPoint_Loop_Intro.html

To avoid the blank time as the first picture fades in you will have to make a more complex animation. This is a little difficult to explain!
A Top image Fades OUT 8secs
B Half way through this next image fades IN (With previous / delay 4 secs)
C This finishes at 12 secs This image fades out with previous delay 12 secs
D Half way through this fade OUT at 16secs next image fade in etc
E End with the first image fade back in

Have a look at this simple demo to understand more

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Microsoft PowerPoint MVP 2007-2023
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