... but they say the healthy way to do it is 2-3 lbs at a time. Also I have to believe that I put on a lb or so of muscle
What they say is true. Also, building muscle is a very good thing. You will experience a temporary weight gain by building muscle, but this is where the fat is burned. You must build muscle in order to burn fat.
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Be Patient When Trying to Burn Fat by Exercise
As you can see, it takes time and considerable physical effort to achieve any kind of rapid fat-loss by exercise alone. So if you want to burn off your last pockets of fat by increased fitness training, give yourself enough time and don't jump onto your bathroom scales more often than once a month. Also, be aware that muscle is denser (heavier mass) than fat. So while you may look leaner, your weight may show only a slight reduction.