One thing for an insulin user on low carb to consider is the amount of insulin you are taking. Excess insulin promotes weight gain. Also, as you decrease your carb intake your need for insulin should become less. If you're having hypos you may be getting too much insulin.
I know no more about it than what I've typed above. You need a low-carbing Type 1, or another Type 2 on insulin, to advise you better.
Re your diet - it looks pretty good to me, except for the oranges (I can't cope with them). Check your sausages - it is easy to get very low carb ones, 1 or 2 grams carb per sausage, from all the main supermarkets these days. IRead the labels. In this case local butchers' may not be the best - you don't know how much cereal they put in the mix.
Have a look at Viv's Modified Atkins Diet, which is a Sticky Thread on the Low Carb section. It has a basic list of low carb vegetables which you can safely eat. Things such as carrots, peas and all kinds of beans need checking for carb amounts - some are higher than others. Most things that grow underground should be avoided. And sweet corn, of course.
On the basic Atkins Induction diet I eat anywhere between 1200 and 2000 calories a day, most of which come from fat. It is true that you don't have to worry about calories on low carb, but as you add in carbs, so you need to think about the calories and lower the fat intake a bit. It's the carb plus fat mix that gets me every time :shock: . Over about 70g carb daily and both my BG readings and my weight start to increase. We are all different - I can't cope with carbs.
For Atkins and diabetes, have a look at Atkins Diabetes Revolution by Dr M C Vernon and J A Eberstein RN. This is aimed mainly at Type 2s, but is all-round useful. I found Bernstein too focused on Type 1, and too American, to be really useful, though it's very interesting. Jenny Ruhl's Bloodsugar 101 (book and website) is also helpful. It's American with conversion charts.
Hope this helps. I'm sure you'll get there!
Viv 8)