You sort-of have the right idea. She let go of her physical body and went back to her non-corporeal energy form. Her powers were a result not from a cosmic energy force, but a direct result of her mutation. And her mutation was controlled by genetics. Genes. Her Genes. She was aware of the changes that were taking place as a result of Magneto's machine on Ellis Island. So she knew what her genes looked like before and after she was hit by that machine. So what she did was build a new body for herself, but at the same time, she changed the genetic code of this body, reverting back to the way she was before the mutation manifested itself. She kept the part of her DNA that let her be telepathic, but greatly reduced the part of her DNA which gave her those god-like TK powers. Then with the powers of the Phoenix at her disposal, she pressed the Enter key one more time, and POOF was once again reborn into a physical being, back to her old self, no longer having access to those powers. Telepathically she ended up being on-parr with Xavier, but as far as TK was concerned she was back to hovering small objects like books and test tubes.
Scott at first thought she was going to die or move on, but she assured him not to worry and begged him to trust her one more time. The bird-like energy being disappeared over the lake, and in its place he found a very worn out, yet familiar looking naked woman floating over to the shore. She asked him to trust her, that this was the best solution for everyone. And he wasn't disappointed. The Phoenix has no equal, no peer, no mother or father, and is doomed to live a lonely existence. But the Phoenix can be defeated by love. In choosing love, she accepted mortality, and by accepting mortality, she found her own redemption, to be with those whom she loved.
The novel BTW is called "Grail". I highly recommend it. It shows the true power and compassion that is Jean Grey.