I would have assumed the resonance form where the oxygen has the negative charge on it would attack the carbonyl carbon in a nuclophilic attack however in the reference it shows a carbon-carbon bond forming to create a ring. So i can only assume the carbanion attacks the carbonyl carbon
The carbon does attack, through concerted electron donation of the adjacent oxygen. I suggest you review Aldol/enolate chemistry, as this is essentially what is taking place here.
How does the CH2 group marked by an asterisk become a CH3 group? Where does the extra hydrogen come from?
If the mechanism proposed is indeed correct, there would have to be an acidic group in the active site of the enzyme catalyzing this reaction which could donate an H+ to the departing CH
2.
As an aside, I find that step of the biosynthesis quite surprising. I'm not sure if it's just a proposed mechanism or if it has been thoroughly demonstrated experimentally, but to me, a CH
2- leaving group seems quite unorthodox, even with the "magic" that enzymes are capable of. Perhaps someone with more experience in biosynthesis than I can offer more insight.