  As a laboratory for loop quantum gravity, we consider the canonical
quantization of the three-dimensional Chern-Simons theory on a noncompact space
with the topology of a cylinder. Working within the loop quantization
formalism, we define at the quantum level the constraints appearing in the
canonical approach and completely solve them, thus constructing a gauge and
diffeomorphism invariant physical Hilbert space for the theory. This space
turns out to be infinite dimensional, but separable.
