Quote Originally Posted by DB_Hunter
Nope, I don't agree Kakashi figured it out by observation and by what Kisame said. Itachi's own words and reactions give it away. He acts shocked, and says "Kakashi-san, you couldn't have..." when Kakashi asks how bad his eyesight has become. This isn't consistent with Itachi's responses to Kakashi's previous deductions about the Mangekyou Sharingan. If you look at how that is shown in the anime as well, Itachi looks far more hostile towards Kakashi after that one remark than at any other time. This would seem to indicate that he is feeling threatned, or that he now knows he is in for a proper fight.
That's a huge leap in logic, even for Itachi. It's ridiculous.

*Kakashi finishes deducing how the Mangekyou Sharingan works based on evidence from past fights*
*Itachi congratulates Kakashi on his intellectual prowess*
Kakashi says: "How bad has your eyesight gotten?"
*Itachi suddenly assumes Kakashi has Mangekyou Sharingan*

Please tell me your recognize what I'm trying to say here...Viewer speculation aside, even inside the Naruto universe it's pretty illogical that Itachi would assume Kakashi had Mangekyou, just on that one seemingly irrelevant comment.

My conclusion on why Itachi was surprised is just as you said, he's realized he's been threatened because Kakashi has him figured out.