It is an auto immune reaction, an immune mediated inflammation of nerves and nerve roots. It seems to follow having been bitten by a raccoon, and seems to affect only dogs. It does NOT affect ALL dogs thus savaged by raccoons, nor does it seem to affect cats or raccoons similarly afflicted. The scenario goes as follows. A few days after having been bitten, the dog begins to be weak on the hind end and gradually becomes more and more paralyzed, eventually losing control of bladder, and in some cases, of breathing.
Fatalities are rare, but known.
Severe cases can result in death from respiratory paralysis. This immune system reaction attacks portions of the peripheral nerves, causing rapidly progressing flaccid paralysis. If you can give supportive care for long enough, the dog gets better, usually within 4-6 weeks. Coonhound paralysis resembles tick paralysis. Affected dogs are at increased risk of future attacks if exposed again to raccoon saliva, since they are not sensitized to the antigen.