OT what to do about my legs!!!

So, I've been working out and i've lost weight, but for some reaosn, since i started working out i now have a fat pocket beside my knees!!! it looks awful! and my thighs have all this skin or something. My arms aren't that bad and i can do weights and fix them, but my thighs already have awesome muscles under that fat, and im afraid if i work them up enough to fix the loose skin i will look like one of those steroid people! And the muscles in my calves are starting to get bigger and i dont want that. but i dont know of a cardio that doesnt use my calves, swimming isnt something i can do no pool i can get to regularly.
any ideas?

if you work on toning, then you won't be building so much muscle. So, work longer, not heavier-no weights. Do more lunges. Or biking, that always works my lower thigh. It seemed that where I put my foot on the pedal (ball of the foot bears weight or heel) works different areas. If I put the ball of my foot on the pedal and use that for pedaling, then it works more my calf area, but if I put more of a flat foot/heel on the pedal and use that, it works my thighs.....make sense?
Although, i did see a new study that showed building muscle burns calories faster than cardio.

Not that I can work on my abs right now, but how am i supposed to get rid of the left over steroid blubber that is just above my 'bikini area' scar line. I'm afraid it won't go away b/c of the scar.

i thought about biking but i dont have a good place for bike riding. A thighmaster type thing might be a good idea, i think my mom has one. I have been doing like leg lifts and stuff, just for the thighs, but the skin isnt going anywhere, its just jiggling away, lol.
chassity, i have this weird problem with my scar too, on the left side of my scar i have alittle more of a muffin top than on the other side! i have gotten rid of most of my muffin top but even when i suck in that one little part wont go away! i talked to my surgeon and he said he had no idea that he couldnt even tell, but that if i wanted to get lipo on it that would be fine. If i had some money i'd just get that knee fat sucked out!
thanks guys!