Did the link that Nan provided above help you understand the ketones a bit better? There is a good diagram on that link.
I think that what you mentioned above:
Is a confusion of 2 different things.
A bounce occurs when
1. the cat's body is used to being in higher than normal numbers, and
2. the blood sugar drops to a range lower than they're used to, and
3. the liver releases stored sugars (like glycogen) and counter-regulatory hormones to
bring the cat's blood sugar back high.
Once a cat's body has become used to, for an example, 300, as a normal number, if the body gets down to even 200 it might react as though that's a hypo. The purpose of that mechanism is to save the cat's body from a hypo. It's just misplaced that it does it in higher numbers that aren't really a hypo.
Here is another explanation of the same thing from the "Basics: New to the Group?" sticky:
- Bouncing - Bouncing is simply a natural reaction to what the cat's system perceives as a BG value that is "too low". "Too low" is relative. If a cat is used to BGs in the 200's, 300's, or higher for a long time, then even a BG that drops to 150 can trigger a "bounce". Bouncing can also be triggered if the blood glucose drops too low and/or too fast.The pancreas, then the liver, release glucogon, glycogen and counter-regulatory hormones. The end result is a dumping of "sugar" into the bloodstream to save the cat from going hypoglycemic from a perceived low. The action is often referred to as "liver panic" or "panicky liver". *Usually*, a bounce will clear kitty's system within 3 days (6 cycles).
Many (most) diabetic cats bounce.
Ketones are a different story. Ketones are produced when the cat isn't getting enough insulin, the glucose that ought to be nourishing the cat is floating about in the blood stream instead of getting into the cells. The body begins to break down fat for energy because the glucose isn't available. Ketones are a byproduct of fat metabolism, and they can begin to build up in the bloodstream.
All of the above paragraph is from the diagram on the link that Nan gave you. Take a look at that for the rest of the explanation and see if it makes sense.
Glad to hear he's a little brighter and eating a bit better. Eating is really important to break the cycle that can result in DKA. So is giving enough insulin - good thing you've increased his dose today.