You definitely CAN gain muscle and lose fat at the same time. When I first started learning about nutrition and how to eat right I went from eating probably an average of 60 grams of protein a day (I used to eat 3 meals, if that, cold cereal for breakfast, whatever the cafeteria was serving for lunch and then a small frozen pizza or a bowl of noodles or something. Some days it may've been considerably less, close to zero, some days it may've been closer to 100 if i had grilled up some burgers or something) to eating at least 1.5g/lb a day, which at time about 270g of protein/day total. I wasn't new to weight training, but my waist shrank and felt "tighter" (how's that for unscientific) and my upper body grew and I gained weight. Those first few weeks were teh only time it ever happened and I'm guessing that my body just had an exxagerated response like a newbie to weight training would have - fast gains. So, n=1, but take it for what it's worth.
Oh and Joe Defranco claimed on the d-tap interview that his freak from monmouth gained something like 8 lbs in four weeks on a restricted calorie, clean diet. And Joe's point was "i didnt do much of anything to help this kid, he's that much of a freak" so I dont buy the explanation that joe is just hyping it to make it look like he can transform people.