Well, at various times we've considered ULA, like UVA and UGA. UGA, of course has two interpretations, since it's located in Athens. I believe in the past ULA was rejected because it could be interpreted as UL-Acadiana. I don't think that would happen, but I wouldn't mind it if it did.
You're right, LA could be misinterpreted as Los Angeles (there is no U Los Angeles), but LOU could be misinterpreted as Louisville, and I think I've seen L'ville listed that way on ESPN.