The randle cycle is an important idea to understand regarding diabetes and insulin resistance.

The Randle Cycle
http://www.functionalps.com/blog/2011/06/25/stress-and-pufa-cause-diabetes-randle-cycle/

Endotoxin (intestinal toxins) are an overlooked contributor to those problems as well.

Endotoxin: Poisoning from the Inside Out
http://www.functionalps.com/blog/2011/11/20/endotoxin-and-liver-health/

January 2009 The Journal of Lipid Research, 50, 1-2.
Endotoxin in the gut and chylomicrons: translocation or transportation?
Carl Grunfeld 2 and Kenneth R. Feingold, Associate Editor
The intestine contains trillions of microorganisms and massive amounts of endotoxin, which if absorbed from the intestinal lumen into the body would result in overwhelming septic shock and death. Recently there has been an increasing appreciation of the role of gut microorganisms and their translocation into the systemic circulation in promoting metabolic disorders including obesity and insulin resistance, as well as in the pathogenesis of very different disorders, such as inflammatory bowel disease, HIV infection, ethanol-induced liver disease, and hemorrhagic shock.

Diabetes Care. 2011 Feb;34(2):392-7.
Endotoxemia is associated with an increased risk of incident diabetes.
Pussinen PJ, Havulinna AS, Lehto M, Sundvall J, Salomaa V.
Both prevalent and incident diabetes were associated with endotoxemia, which may link metabolic disorders to inflammation. The results suggest that microbes play a role in the pathogenesis of diabetes.

Diabetes Care February 2011 vol. 34 no. 2 392-397
Endotoxemia Is Associated With an Increased Risk of Incident Diabetes
Pirkko J. Pussinen, PHD1, Aki S. Havulinna, MSC2, Markku Lehto, PHD3,4, Jouko Sundvall, MSC2 and Veikko Salomaa, MD2
OBJECTIVE Diabetes is accompanied with a chronic low-grade inflammation, which may in part be mediated by endotoxins derived from Gram-negative bacteria.
RESEARCH DESIGN AND METHODS We investigated in a population-based cohort whether endotoxemia is associated with clinically incident diabetes. The serum endotoxin activity was measured by limulus assay from the FINRISK97 cohort comprising 7,169 subjects aged 25–74 years and followed up for 10 years.
RESULTS Both the subjects with prevalent diabetes (n = 537) and those with incident diabetes (n = 462) had higher endotoxin activity than the nondiabetic individuals (P < 0.001). The endotoxin activity was significantly associated with increased risk for incident diabetes with a hazard ratio 1.004 (95% CI 1.001–1.007; P = 0.019) per unit increase resulting in a 52% increased risk (P = 0.013) in the highest quartile compared with the lowest one. The association was independent of diabetes risk factors: serum lipids, γ-glutamyl transferase, C-reactive protein, BMI, and blood glucose. Furthermore, the association of endotoxemia with an increased risk of incident diabetes was independent of the metabolic syndrome as defined either by the National Cholesterol Educational Program-Adult Treatment Panel III or the International Diabetes Federation. Endotoxin activity was linearly related (P < 0.001) to the number of components of the metabolic syndrome.
CONCLUSIONS Both prevalent and incident diabetes were associated with endotoxemia, which may link metabolic disorders to inflammation. The results suggest that microbes play a role in the pathogenesis of diabetes.