Several years ago I borrowed from my 401(k). I am now over the minimum withdrawal ago and would like to know if it is possible for me to withdraw and repay simultaneously. I've been laid off and would like to avoid the initial loan being turned into a distribution if I can't pay the loan balance.

I don't understand what you mean by "withdraw and repay simultaneously" - please clarify. If you no longer are employed at the job where you took the 401(k) loan, you must either repay the loan or ot will be reclassified as a withdrawal (since only active empollyees can have a loan).

My 401(k) is still with my previous employer and as long as I make payments on the loan, the loan is not being classified as a withdrawal. It is still classified as a loan. I am asking if I can take withdrawals (and since I am short of cash, use the withdrawals to cover the loan balance).
Thanks.

That's robbing Peter to pay Peter. The custodian will not let you do it once they figure out what is being done.

I don't see any problem with it.