I did it slightly differently. Start with a length of line long enough for the two loops (plus a little bit) and the two tails. Pass one end through at the base of the other end's tail. Pull it all the way through so that the hole inverts. Now pass the other end through the first end at the base of the tail. Pull it far enough that the inverted spot goes through. Now un-invert that spot. You wind up with the figure-8 as shown in my first picture.

Topologically speaking, this is the same as passing a loop through, except that you get by with a smaller hole that doesn't distort the line as much.

I hope that helps,
Eric