I don't have a formal proof, but I expect the expected value is $\lg n + O(1)$ bits. In particular, heuristically I am expecting something like $\lg n + 2.9$ bits or so (but I don't trust that the constant is exactly right, so take this with a large grain of salt).
Where did I obtain this from? Well, after $\lg n$ steps, $v$ will be of size comparable to $n$.
Now as a heuristic, suppose that $v$ is uniformly distributed in the range $[n/2,n)$ at a particular step. Of course $c$ will be uniformly distributed on the range $[0,v)$, as this is an invariant of the algorithm. Then this step will terminate if $c < n/2$. The probability of this is
$$\begin{align*}
\Pr[c<n/2] &= \sum_{v=n/2}^n \Pr[c<n/2 \mid v] \Pr[v] = \sum_{v=n/2}^n {n/2 \over v} \cdot {1 \over n/2}\\
&\approx \int_{1/2}^1 {1 \over x} \; dx = \log 2 \approx 0.69.
\end{align*}$$
On the other hand, if $c>n/2$, then it will not terminate, and after the next step, $v$ will be uniformly distributed on $[0,n-1)$ and $c$ uniformly distributed on $[0,v)$. Starting from a point where $v$ is uniformly distributed on $[0,n-1)$, it takes approximately 1 more step (on average) to reach a point where $v$ is uniformly distributed on $[n/2,n-1)$, and then we're back to where we started. We expect to have to repeat this procedure $1/0.69 \approx 1.45$ times before it terminates, and each repetition takes 2 steps, so in total once we reach the point where $v$ is uniformly distributed on $[n/2,n)$, we expect the algorithm to take $2 \times 1.45 \approx 2.89$ steps (on average) before terminating.
Summing these up ($\lg n$ steps in the first phase and $2.89$ steps in the second phase, on average) yields a number like $\lg n + 2.9$.
I have made some approximations and shortcuts and used some heuristics here, so this answer is a bit sketchy, but I would bet that it is approximately correct, though the constant term might not be exactly right.