I was going to post this next week but seeing as CB asked...
The Week Three Stall
The dreaded week three stall doesn't happen to everyone when starting a low carb diet but it is very common. The best thing is to keep doing what you've been doing, and the scales will start moving again, usually by week five.
During the first couple of weeks of your low carb diet a number of things have occurred. You have depleted the glycogen stores in your liver and along with the weight of glycogen lost, you have lost three or four times that weight in water. You have also been using up your fat stores. So if you have lost 10 lb then approximately two of that is glycogen, seven of water and one of fat stores. By using up your glycogen store you have forced your body to turn to other sources of energy. Your body has been producing new enzymes to process the different diet and your brain and muscles have adapted to using ketones instead of glucose.
At three weeks your body has adapted to the new diet and your metabolism has changed from carb-burning to fat-burning. Your muscles have switched over to burning the free fatty acids that are continually released from your fat cells when insulin levels are low. But don't think you can rapidly lose a few pounds and your body isn't going to notice! Since you have also lost a lot of water your body releases a hormone (vasopressin antidiuretic hormone if you want to be precise) which is usually released during dehydration. This causes your body to retain water. So while you are still burning fat, maybe half a pound up to two pounds a week, your body is hanging on to water and this will mask the loss of your fat stores. One way of helping is to keep drinking lots of water. Once your body recognises that it isn't dehydrated the hormone levels go back to normal, the retained water whooshes away and the scales start moving again.
Just to reiterate, a stall in weight loss in weeks three and four is normal, expected, and you are still using up your fat stores even if the number on the scales isn't changing.