If you're looping with a sleep (instead of actually hanging on a blocking function to return) then I think you just want to just do away with the alarm all together and keep a loop counter.

$loop_count = 10;
while( ! $done and $loop_count-- ) {
   $done = is_it_done_yet();
   sleep 1;
}
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The alarm is more useful if you have to break out of a blocking function, in which case you probably wouldn't be using sleep anyway.

Update...

On re-read, it sounds like you don't want to get caught hanging on is_it_done_yet(). In which case I think you want to alarm this function separately in an eval.

while( ! $done ) {
   eval {
      local $SIG{ALRM} = sub { die "alarm\n" };
      alarm 10;
      $done = is_it_done_yet();
      alarm 0;
   };
   last if @$ and $@ eq "alarm\n"; # hit alarm timeout
   sleep 1;
}
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