I attended this MBA seminar on Sunday, hosted by Knewton. The company's CEO suggested that taking the test more than three times could hurt your admission chances. I've also read that most test takers give it at least two "goes", so I'm inclined to say that taking the test a third time won't be a deal breaker.

However, you should focus on changing your learning habits: if your second attempt did not yield better results, then you should thoroughly analyze your method. You obviously need to chance something! If I were you, I wouldn't give up my dream: I'd give the GMAT one more chance, but only after I strongly feel that I'm ready. After all, taking the test again and again might not only look bad (the extent to which it does is debatable), but it also costs time, money and energy!

Ditto what DanaJ said. If you rock the GMAT the next time then adcomm is likely to ignore your past disappointments... Of course, the danger with repeating is if you get the same score you simply reinforce the idea that that is the best you can do. So only retake it when you begin to consistently score significantly higher in practice tests. I scored 660 and took a couple weeks off and began to work my way back with a whole new approach. I am now consistently scoring around 700 but before I take it again, I want to be scoring around 740 consistently.

Good Luck!

You didn't mention your goals. Is an MBA essential for your goals? Or could another track help you achieve your aspirations?