I've looked through posts with no real answer to this question: is the address 127.0.0.1 a hardware set address much like promiscuous mode is a hardware setting on devices? I've tried to set my address to 127.0.0.1 on eth0, disable the lo, and even change the lo address, to make packets go out the eth0 port with address 127.0.0.1. The packets always end up on the lo port when I use sniffing tools like wireshark. Is there a way to do this, is this hardware or hardcoded into the drivers?
The loopback address is controlled by software (e.g. in the kernel). It is never associated with any hardware.
You don't specify your operating system, but unless it's very unusual, there really isn't a way to do what you ask (have packets addressed to 127.0.0.1 appear on an external interface).
Update:
Here's the spec:
127.0.0.0/8 - This block is assigned for use as the Internet host loopback address. A datagram sent by a higher level protocol to an address anywhere within this block should loop back inside the host. This is ordinarily implemented using only 127.0.0.1/32 for loopback, but no addresses within this block should ever appear on any network anywhere [RFC1700, page 5].