Iodine therapy works best with the fewest side effects when the paths of elimination are already open and working well. I would say that your body had released something that needed to be gotten out ASAP and your system was doing what it needed to do.
There are a lot of agents that are claimed to "cause" diarrhea when, in fact, it is the body's wisdom that is creating the conditions to flush out the offending substance before it is absorbed or reabsorbed to cause further problems. Everything from excess magnesium and Vitamin C to E Coli and Salmonella bacteria are passed quickly from the body through loose or liquid bowel movements because if they are allowed to remain they can be highly toxic or even deadly.
Ever wonder why some people can eat a hamburger infected with E Coli bacteria and have virtually no symptoms, while others may have violent diarrhea, yet others will suffer kidney failure, seizures, coma and death? The two most important reasons are a strong immune system and a strong elimination system that can fight and eliminate the dangerous toxins.
I believe that eventually Iodine will help us fight off many offending toxins and organisms when the body is fully supplied. Meanwhile, many of us have to deal with various forms of detox and getting our systems up to par.