lack of carbs has a diuretic effect which can make you look more ripped or smaller. but of course your glycogen stores will be decreased and that does make the muscles look smaller and along with the lack of water in the muscle you are going to look horrible.
low carb too long decreases leptin. low levels of leptin = low metabolism. the body's way of responding to your dramatic diet. Carb up every 3-5 days is the best way to solve this problem.
the body can store a crapload of carbs, i think 100 grams in the liver, and 200-400 in the muscles, but of course this is entirely dependent on how much muscle you have. That's why the weekend feedings on the anabolic diet are so carb laden since you assume you start at zero.
either way, be careful of assuming that you can just drop carbs and watch the weight fall off week after week. if that were truly possible, then in theory, if you were at a calorie deficit everyday, then eventually you'd wither away to nothing as your body continues to burn. your body will re-negotiate metabolism and get back to a steady state of neither loss or gain.