We study the fluid limits of loss networks under Kelly's scaling. In the case of heavy traffic for a single node and J classes of calls, we prove a degenerate diffusion approximation theorem around the corresponding fluid limit. After a careful analysis of some reflected random walks in N, we prove that Hunt and Kurtz's conjecture (1994) for the trunk reservation policy is wrong. We conclude with some remarks on the conjecture in the case of an uncontrolled network.