Thanks for your post, UM. I think that Gary Taubes has a good answer to your question in his recent book, Why We Get Fat. I'll quote:
...insulin signals to our kidneys to reabsorb sodium, which in turn causes water retention and raises blood pressure. When insulin levels drop, as they do when we restrict carbohydrates, our kidneys will excrete the sodium we've been retaining and with it water. For most people this is beneficial, and it's the reason whey blood pressure comes down with carbohydrate restriction. (This water loss, whcih can be a half-dozen pounds or more in a two-hundred pounder, can constitute most of the early weight loss). For some individuals, though, the body will perceive the water loss as something to be prevented. It does so through a web of compensatory responses that can lead to water retention and what are called electrolyte imbalances (the kidneys excrete potassium so save sodium), and the result is [side effects like weakness, fatigue, nausea, dehydration, diarrhea, constipation [and] a condition known as postural, or orthostatic hypotension.
In this latter case, where people experience low blood pressure and other side effects, Taubes recommends supplementing the diet with sodium (to the chagrin of orthodox medicine!). Otherwise, the reduction in blood pressure is merely an added blessing from low carb!
In short, the water loss, and more importantly the reversal of edema, is a direct cause of low carb dieting that goes well beyond the loss of water that is associated with glycogen.