The only way I have lost fat and gained muscle simaltanously was thru carb cycling. Forget the contemporary "cutting" cycle and look up carb cycling.
I went from 232 to 207 in less than 3-4 months and I didnt lose a drop of muscle or strength along the way. I cant say for certain if I actually gained muscle, but I sure in fact did not lose any and I appeared to get bigger, but getting cut does that too
I have been a firm believer of Carb Cycling ever since...Thanks to Boyd Meyers!
Here's what I had done a few months back
232 lbs - April 28th 2007
215 lbs - June 25th 2007