When you take out the cyclic part, and talk about ketosis by itself, it can help understand what's going on. Ketosis happens in stages:
- Deplete the glycogen stores (usually takes 2-3 days). Until this happens, ketosis won't happen. This can be sped up by exercise.
- Retool the metabolism to use ketones (usually takes 2-4 weeks, 3 on average). Ketosis will be happening from when your glycogen stores are depleted, but the body is not efficient at it.
Essentially, as long as you have glycogen, you have blood sugars that your body can use to keep your brain happy. Glycogen is the energy stored in your muscles and organs. When your blood sugar dips below what your brain needs (roughly 125g of blood sugar/day), your body releases glucagon. Glucagon is a catabolic hormone used to pull energy out of your muscles, organs, and fat cells. While your muscles and organs can burn fat directly, your brain cannot.
Once the reserve of glycogen is gone, and there is still a lack of sugars in the blood, the body starts producing ketone bodies. This process basically converts the fat to a substance your brain can use for energy. At the same time it's starting the gluconeogenisis which converts protein sources to blood sugars. This is why all ketogenic diets have a good amount of dietary protein. The body will process the dietary protein before the muscles/organs. Initially, the body will over-compensate and convert more fat to ketones than it needs. This is a happy time for losing fat. Once the fat is converted to ketones they are either used or urinated out--it won't be re-assimilated as fat. Over a period of roughly 3 weeks (2-4 weeks), your body adjusts so it is converting the right amount of fat to support its needs.
Increasing the demands for energy while in a state of ketosis may cause the gluconeogenisis to be the principle provider of energy. This is a bad thing, as the demands can quickly get to the point where the body has to resort to cannibalizing the muscle you are trying to build. This is why cyclic ketogenic diets were invented. It prevents the body from getting to the point of cannibalizing itself, while still keeping the fat burning benefits of ketogenic diets.
Once you "carb up", the body secretes insulin. Insulin is an anabolic hormone which triggers storing the energy in your muscles, organs, and fat cells. The good news is that the energy goes where it is needed most--which if you exercise will be your muscles and organs. Over-carbing will deposit the extra energy into your fat cells. The carb up replenishes your glycogen stores, which will help you in the gym.