It's amazing how much you miss when you don't write everything down. I go on and off recording stuff, but I try to get on top of it a couple times a year to get a clear sense of where I'm at. Weight yo-yoing is common. Just make sure you test before you work out, and right after you work out. I try to eat some protein with in an hour before a work out to keep my sugars steady, and I try to time my work outs shortly before a meal so that if sugars are starting to drop I can counter them with calories that were already intended for my day. (Nothing is worse than at the end of the day having a big low and feeling like you blew your work out because you had to follow it up with a bunch of sugar)
I've gained 15 lbs as a diabetic, and I've lost (Healthily and slowly) 15 and have been at my current weight for the past 4 years. I would mention to your doctor that you want to start losing weight. You may have to learn how to adjust your doses accordingly. (When I'm consistent about working out, I need about 2 units less of lantus a day, and my carb to insulin ratios are lower as well)
Good luck! It's absolutely doable! Keep glucose tabs on hand!