I need to do exactly what the help topic http://resources.arcgis.com/EN/HELP/MAIN/10.1/index.html#/Select_By_Location_Select_based_on_spatial_relationship_within_the_layer/0017000000tr000000/ says can be done, but they do not include the model architecture:
The Select Layer By Location tool allows the Input Feature Layer to be the same the layer specified in theSelecting Features parameter. A useful application of this behavior is to select adjacent, connected, or nearby features within a layer. Different Relationship options can be used to generate the desired analysis or result. For details of how the Relationship options differ, see Select By Location: graphical examples.
A loop inside a script or the For or While iterators in ModelBuilder can be used in conjunction with this approach to expand a selection based on a number of iterations or until some criterion is met. One common criterion is expand until no new features are added to the selection. The Get Count tool can be used to establish when the number of selected features stops changing (therefore stops growing).
Could someone show me how this type of model is put together?
I'm especially having trouble determining where I can put GetCount functions in the model to get numbers of selected features before and after each Select by Location, and also figuring out where to put a While iterator (if indeed that is the correct iterator to use) so that only the Select by Location process is repeated and not the entire model.