Nitrates don't usually spike, they just continue to accumulate.
Alrighty. When they reach 40 - 60 does that mean I am cycled?
Hmm, I'd wait it out a bit. You're seeing a nitrite spike which does not always happen with TSS but it certainly can. Each tank is different. What's your ammonia reading? Having 2ppm Nitrites present is not a problem, it is part of the cycling process. You only need to worry about nitrites if they get very high, 4ppm or over. I've read that levels over 4ppm can stall a cycle. In that case a water change would be needed to bring the nitrite back down to manageable levels.
Nitrite eating bacteria can also take a longer time to colonize your filter. Usually the nitrite phase lasts longer than the ammonia phase.
Sounds like a plan. As long as you haven't added any ammonia in the 24 hours before you add the fish you should be just fine.
How much should I take out of the water volume now? 75%?
Beautiful tank and beautiful fish!