I wanted to show google adsense ads before headline so I added code in the loop. Everything is fine in single posts BUT in frontpage my ad shows after each post. How to place my ad above post without this issue? Please help, thank you.

What version of Atahualpa and wp?
What is the URL?
Where in the loop did you put the code?

Note: as a personal opinion, I refuse to go back to a site that has an Ad between each post and I thought I read somewhere recently, that google is not rewarding that type of ad placement

Atahualpa 3.5.3 WP Version 3.0.1
For example single post: http://docs.e7.lt/dos-komandos/

<?php /* Post Container starts here */
if ( function_exists('post_class') ) { ?>
<div <?php if ( is_page() ) { post_class('post'); } else { post_class("$odd_or_even"); } ?> id="post-<?php the_ID(); ?>">
<?php } else { ?>
<div class="<?php echo ( is_page() ? 'page ' : '' ) . $odd_or_even . ' post" id="post-'; the_ID(); ?>">
<?php } ?>
<?php bfa_post_kicker('<div class="post-kicker">','</div>'); ?>
<?php echo 'my_adsense_code'; ?>
<?php bfa_post_headline('<div class="post-headline">','</div>'); ?>

Yes, I know, that place can be annoying to visitor but my CTR is very low. For example this month my ads was viewed 2 740 and clicked only 13 times. I need to place ads in more important area to catch visitors eye. You can look at my ads at this website: http://docs.5k.lt You see they are in sidebars and in the header but that don't help. What do you suggest?

I added it in above loop area and it works like I want.