http://pi.lilly.com/us/humalog7525-pi.pdf
If you check page 2 of here, you will see that the insulin you are on if I have understood it correctly, is one which has a component of rapid acting insulin to cover 1-2 meals and then a longer/intermidiate acting which will deal with your blood sugars around the clock if you have 2 injections.
That means also that to have the basic fasting levels etc correct, your insulin dose cannot just be changed entirely - in the scenario you describe, the entirely normal processes of you body will cause you to go high during the night. Now if you wanted to avoid that, you would have to take insulin also before bed sometime, not just at breakfast, which would then cause you to hypo if you did not make up for the rapid acting part of the insulin with some food.
Is this somewhat clear? Look at the profile on the graph, it tells you roughly how it behaves on average.
About weight loss, I think that low(er) carb makes sense indeed. I don't think on this sort of insulin regime that it is very safe to do the very low calorie diets. There is a link between the amount of insulin you take and the tendency you have to keep on the pounds - there is also a tendency for bigger people to need more insulin. I think if you can reduce your carbs as you have, you will find it easier to lose weight. But because of the way your insulin behaves, you may find it tricky to do that without the rapid making you go hypo or the longer acting not being suffient. If you have these problems, I would ask to go on Multiple Daily Injections/Basal/Bolus.
That lets you deal with the two aspects of your body's needs independently, and has helped me a great deal even if it isn't perfect.
Since going on insulin in April, I've lost a good deal of weight - a few stone, might be 3. If you can bear the hassle of the extra injections and can get them persuaded, it may be easier to spot the connection. At least I found that mixed insulin was difficult to manage for above reasons.
Hope this helps.