At one time I was in the 400 range so I guess I speak from some experience here.
You don't have to lose the fat first before you begin to gain muscle. In fact, it will benefit you greatly and directly if you hit the weights with some vigor right now.
The body's thermic response to food and basal metabolism account for 90% of your daily needs. By increasing lean body mass, you increase caloric expenditure every minute of every day.
Do not be fooled by the weigh-in before and after workout. This is water and not something you should look at as to whether or not you have a sccessful workout. If anything, weigh-in before and after just to gauge water loss and refill your body.
Water is CRITICAL! At your weight, with a moderate workout schedule, you should be drinking 2 gallons a day if fatloss is your main priority. Skip most other liquid and drink water.
Eat some protein with every meal. Not only does it fill you up, it is a high thermic nutrient and therefor you burn calories just digesting. It also replaces many simple carbs if you make a concerted effort to consistantly eat protein.
For now--do not do real intense cardio. I know this contradicts some, but until you get your body composition turned around, I would suggest 30-60 minutes 3-5 times a week at a moderate pace.