Why is it that a CD track, when compressed with a lossless codec, has a similar size to the same track after it has been encoded using a lossy codec and then converted to wave and then to lossless? I thought lossy encoders took out information, thus theoretically the lossless codecs should be able to produce a file the same size as the lossy encode.

I know there is something I'm not understanding. Why doesn't it work this way?

Just the opposite. Lossy encoding introduces some noise and artifacts which succeeding compressors (lossy or not) will have to deal with.

Edit: I think I understand you point now, actually, although it is still true that lossy encoders throw out data from the original and have a determinable filesize. We already know that it is possible to express the information in the amount of memory of the lossy file, but the information cannot be as efficiently expressed by the lossless encoder.

That's right. Lossless encoders are designed to encode 'music' not noise. They (in simple terms) work on a set of rules for how a musical signal is likely to behave over a short number of samples, add noise to that signal and they don't work as well. You may even find that the wav-lossy-wav-lossless process produces a larger file than wav-lossless.