Scott...

what the authors here are trying to explain is the difference between dietary ketosis and diabetic ketoacidosis. The former is harmless and the latter can only occur in the presence of a high uncontrolled blood glucose. Ketones are present with both conditions but the cause and outcome of each are very different.
Type 2 diabetics CAN wind up in ketoacidosis if they don't control their blood sugars. While type 2's do still produce some insulin of their own, how much they produce is highly variable which is why some type 2 diabetics will sometimes also need insulin to control their blood sugars (I was headed that way myself until I began low carbing).
Bottom line is that if your blood sugars are controlled and you test positive for ketones, it's not cause for concern. However, if your blood sugars are high and you test positive for ketones, it's time to contact the doctor ASAP.