You're not bad. You need muscle though. Take all the above advice, and also don't go the GNC.
I didn't read the middle part of the thread, but you need a muscle building workout and more sensible eating regime. I agree thwe calories are way too low. Starvation mode will keep the bodyfat on you with a slower metabolism.
Again, the reason for the protein shakes is if you miss a whole food meal, you can supplement with the shake. Eat every 2-3 hours. Good luck.
Like was said before, muscle burns fat... get muscle...