if you've reduced your calorie intake you are going to be losing muscle. it's near impossible to gain muscle and lose fat at the same time, and it's very difficult to lose fat, and not lose muscle mass at the same time. muscle consumes calories 10x as fast as fat, and without the required calorie intake, the muscles will be broken down and used for energy by your body.

the super low calorie diet you're on would work for a chick looking only to get skinny, but you're going to lose muscle mass almost as quickly as the fat on that plan.