What did the doctor say about the ketones? I've not experienced a test for ketones in a routine check for vomiting and diarrhea. Sounds like he has a stomach bug. Keep him hydrated by giving him small sips of water, but stop feeding him so that his system has time to heal. You can try small amounts of broth or really soft easy to digest foods such as custard but not "real" food.
I wouldn't be concerned. Ketones can be in indication of an illness. Of themselves, they're not dangerous. I would call his pediatrician and ask when you should bring him in to see him if he doesn't get better.
My granddaughter had breath indicating that her body was burning fat during a serious asthma attack when I took her to the ER. I think they called it ketosis. They treated the asthma and the breath smell went away.
Your four year old probably has the stomach flu and the ketones will correct themselves once he's recovered. Losing 2 lbs. in 1 week in not something to worry about. He's not eating. He's losing water weight. He'll be fine. Call his pediatrician to find out more so that you can relax some.
I don't know what carbon monoxide detectors has to do with his illness.