Hi
I'm Type 1 and I've been diabetic for nearly 18 years. My control hasn't been the best over the last few years and I used to convince myself that when my sugars were better controlled I'd put on loads of weight (easily half a stone in a fortnight). The reason for the weight gain, however, was that I'd actually eat more and therefore inject more insulin. Whereas I'd usually skip lunch and have a choccy bar (naughty I know) I'd then have a proper meal with fruit. The carbs and calories were much more than my Twix which led to the weight gain. The more insulin you take the harder it is to lose the fat aswell.
The real answer it to put less into your body (food and insulin) and move more! Honestly, write down what you eat, how often you do any exercise and the amount of insulin you use and you'll see what I mean!
Hope this helps!
L