Hi Nancy6,
I know exactly how you feel. I was diagnosed 2 and a half years ago. It was like as soon as I was told I was Diabetic someone flicked a switch and I craved chocolate. Before I could take it or leave it, but from that day forward I craved it. Chocolate, cakes anything I shouldn't have. I suffered for ages, doing my best to avoid it, trying to diet, as that would all help my diabetes. It wasn't until I found this site with the low carb info that things changed. I only found this site about 3 months ago.
I started low carbing and now no cravings. I do have 74% cocoa or higher chocolate sometimes but its not a need anymore. Also yes in the first few weeks I didn't feel great. What your experiencing is sometimes called 'Atkins Flu'. But you have to consider that you have radically changed the way you eat. Your body is adjusting to that, give it time and you will feel great. Its also a great feeling to now be in control. I also eat alot less which is great, the pounds are slowly falling away as are my BG numbers. My DSN was so pleased with my results that she has reduced my medication! In just 3 months.
As to how the body works, Im not totally sure. I guess eventually over many months or years the body may start to work better at dealing with the sugar and carbs that we do eat. After all mine certainly has been abused over the last 15 years. We can't expect to turn around the damage years of abuse has done in a few weeks, it may take years to improve. But Im no expert, someone will probably come by soon with more information.
Id just like to say stick with it and soon you will be feeling so much better.