Electronic – Arduino 4-20mA transmitter

1. Shorting. As Olin Lathrop mentions, the power supply (at the receiver) sending power to the sensors should be current-limited. Say the power supply driving the loop is +40 VDC, but current limited to around 30 mA -- perhaps by using a LM317 and a 47 ohm resistor in the "current limit" circuit shown in the LM317 datasheet and the " Simple circuit to limit current through a FET " question. (It doesn't matter if the current limit is in series with the "hi" line going out to the sensor, or in series with the "lo" line coming back from the sensor to the 250 Ohm resistor, or both). If something horrible happens and the two lines going out to the sensor are shorted, the LM317 limits the current to 30 mA through the short and through the 250 Ohm sense resistor, resulting in 7.5 V across the sense resistor (or perhaps only 5.6 V across the resistor with a different configuration of ADC-protection diodes), zero V across the short, and the rest of the +40 VDC is across the LM317 current limiter. That gives at worst 30 mA * 7.5 V = 0.225 W, so a single common quarter-watt resistor can (just barely) handle it indefinitely. The LM317 has thermal overload protection and can withstand the full 40 VDC and 30 mA current indefinitely.

2. Isolation. The two wires running out to each sensor should be insulated, and each sensor itself should not have any other current-carrying wires connected to it, so each sensor is fairly well isolated from all the others (even if the "hi" lines for all the sensors are connected together at the receiver). The current going into any well-insulated object should be equal to the current coming out of that object -- electrons generally don't jump out of wires -- so I don't see any path for "ground loops" anywhere. The main advantage of current loop sensing is that it's much easier to insulate current-loop wires to give practically zero leakage current than it is to make voltage-sense wires highly conductive to give practically zero voltage drop.

3. Multiple receivers. No matter what you do, you can't have hundreds of receivers along a loop. I suppose you could sacrifice some noise rejection and use 50 Ohm sense resistors to get a few more receivers before it doesn't work at all. But eventually, you're forced to either (a) use "Current Loop Repeater" devices, or else (b) use "zero voltage drop" current-to-voltage converters aka "transimpedance amplifiers". Alas, some receivers assume that they can connect one end of the 250 Ohm sense resistor to safety ground -- that works fine as long as that's the only receiver that does it; connecting merely 2 such receivers in a loop to a sensor causes bad data.

4. Surge suppression. Sounds fine, possibly already a bit of overkill. Perhaps add a Zener to protect the ADC from over-voltage and reverse-voltage.

The effective output resistance of an RC low pass filter is exactly 20 kohm i.e. it is the resistor you chose. If you want it to drive an LED you are not going to get what you require. For instance, the LED and 1k (output load) will significantly affect the cut-off frequency (make it about 20 times higher) and you won't get the current into your LED because of the series 20 kohm.

You might want to consider an op-amp buffer or maybe a BJT buffer between filter and LED+1kohm.