Studying this at my school, and there has been some hand waving regarding mechanism - This was on UTD (taken off the normal web - I didn't take content from a secure server). Dont know if this helps or makes things more confusing:
A transcellular cation exchange has been thought to play an important role in this process [2]. Some of the excess potassium enters the cells, with electroneutrality being maintained in part by the movement of cellular sodium and hydrogen ions into the extracellular fluid. The ensuing intracellular alkalosis in the kidney would then diminish proximal ammonium production. However, later studies suggested that the primary defect may be in the thick ascending limb, where ammonium is normally reabsorbed into the medullary interstitium and is then resecreted into the medullary collecting tubule [4]. Hyperkalemia decreases medullary cycling by inhibiting ammonium reabsorption in the thick ascending limb. Potassium and ammonium compete for a common transporter in the luminal membrane which can function as a Na-K-2Cl or a Na-NH4-2Cl transporter. A review of loop transport mechanisms can be found elsewhere. (See "Diuretics and calcium balance".)