Actually, neither muscle or liver glycogen need be zero for ketogenesis to occur. There is simply an inverse correlation between liver glycogen and ketones. Whenever the liver is producing glucose via gluconeogenesis, which happens almost all the time, except when insulin levels are high right after a meal, ketone bodies are formed. They are an inevitable byproduct of gluconeogenesis. The greater the demand for glucose, whether from starvation, exercise, or hypoglycemia, or whatever, the more ketones are produced. For instance, when hypoglycemia is induced with insulin, the liver generates glucose both by breaking down its own glycogen, and by forming new glucose from amino acids and fat derived glycerol. Ketone bodies are formed during that gluconeogenesis, even though there is still plenty of glycogen left in the liver.