Swimming exercise question:

Due to a back injury I am unable to do much cardio exercise, except in water. In a warm water pool I can do most anything, and have been swimming for several hours at a time with water weights. For the past several months I put in about  8-12 hours a week working with the heaviest foam barbells available (I started light and worked my way up to the heaviest), and remain constantly active during my time in the pool, laps, aerobics, stretches, treading water, leg work, trunk twists, etc.  At home I am active with household chores, and general movement, but I wouldn't call it exercise, just normal activity. Also, despite my efforts in the water, I really don't 'work up a sweat', since the water is more of a resistance training, and you don't 'sweat'.
BUT... I have noticed two problems. #1) I am not losing weight and #2) I seem to be getting larger.
My clothing is tighter and more uncomfortable.
I am definitely getting muscle in my arms, shoulders, etc, my legs are more muscular, and tighter, but there is still so much fat.
My sister said that I am building muscle underneath the fat... the muscle is pushing the fat out (making me feel and look larger) and soon the muscle will start burning the fat also.
Since I have no experience with this, I don't know what to think. Right now I feel like a sumo wrestler, big bulky and bummed out. But I do love the swimming, and feel better after a good 3 hour workout.
How does a big person deal with newly developing muscle, and is it true? Does the muscle 'push the fat out' at first?
I had one other swimmer tell me that swimming really won't make you lose weight, that you have to do the sweat-cardio floor-workouts, which I just can not do. 
Thanks.

As a general rule, if you look at exercise as a form of wellbeing and not a weightloss tool, you will be much better for it.  I love running.  I do it 5-6 times a week.  Some of them are really long.  But I lose weight when I hit my calorie and carb goals.  I don't lose weight when I run a long ways.  It helps, but it is severely over blown, IMO.

Exactly this.  

What's your food like? Are you tracking, weighing and measuring all your food to make sure you aren't gaining weight? Have you been on the scale? Just some thoughts. 

I am a swimmer, and I agree with the above posts. Loosing weight is about the food choices, not about how much exercise you get in.

You can get a really good cardio workout ("work up a sweat") swimming if you are swimming laps. I swim laps at least twice a week for about an hour, and I can get in about a mile and a half in that time. Swimming is definitely a great workout!

Thanks for the replies.
I eat 1200-1600 calories a day on average over months without losing a pound, and almost never go above 2000, even on a birthday or special occasion. Because of my RNY, my capacity is around a cup. My doctor scoped my stomach recently and said it was at 2.5 centimeters. I have been careful not to overindulge or eat more than I need. 
However:
I eat mostly carbs as I eat little meat, and most plant and plant proteins have carbs. Example: a protein bar favorite of mine has 180 calories, 10g of protein, and 16g carbs. This is usually how I start my day, a protein bar and coffee.
I am not vegetarian, but given a choice I prefer a rice cake or a handful of trail mix over a steak. I just don't like meats, and eat absolutely no fish or seafood (due to an allergy) at all. But now and then I will eat some turkey, chicken or beef, usually with a sadness that comes from knowing they were once living, beautiful beings. Yeah...hypocritical...I know... which makes it all the worse for me.
Still... A cup of oatmeal has about 42 carbs and 5 grams of protein. A Morning Star Farms black bean burger has 10g of protein and 13g of carbs. (I prefer to make my own than to buy them premade.)
An apple has 25g of carbs, and it's a natural, whole, healthy, fiber filled food. 
I must find a way to work past the way my body processes carbs. I just think abstaining from carbs in exchange for meat-eating is not something I want to do, and I would love to go all vegetarian or even vegan, but still have to cook for my husband, who can gobble an entire pepperoni and cheese pizza by himself and not gain a pound. 
So there's swimming.... which is about the only pain free pleasurable exercise I enjoy. And I do agree, I feel healthier and stronger, even if I am not losing pounds of fat. I am hoping it will all change soon and the muscle will start burning the fat, if that's possible.

While swimming a weight loss goal be not set. Weight loss goals can be easily accomplished with calorie count. Keep a check for calories you are eating in your diet for entire day.

You don't say how far out you are, because we definitely eat more the further out we are.... Most people who are still in the weight loss stage eat below 1000 calories most days. For some people they won't lose if they are above 900. Exercise makes us feel great, and is important but the weight loss comes with what is on our forks.

Honestly, sounds like you are probably not getting enough protein and too many carbs (even if they are 'good' carbs). Do you count your protein grams for the day? 60-80 is the minimum, but honestly I won't lose if I am only eating 60g. Maybe you can mix some unflavored protein into your beans or soup. I also use Fairlife milk, which is lower carb and higher protein. If you are having a shake I would make sure it is at least 30g protein.

I have a pool and swim all summer. Is set my timer for 30 minutes to make sure I am doing at least 30 active minutes in the pool like you - laps, weights etc... I love it.

Are you weighing yourself? For me I weigh daily. I feel it keeps my accountable and if I see the scale going the wrong direction for several days it makes me re-evaluate what I've been doing. Some people say, stay off the scale. That wouldn't work for me. Can't be obsessive over every number though. Have to look at trends. I record once a week on Wednesdays and Monthly on the 23rd (my surgery date)

 Edited to add: You still need to think protein forward. Protein and veggies first then fruit and then IF you have room carbs. One of the ladies on the RNY board always does the Black Bean Burger with a slice of cheese and a fried egg on top. Egg and cheese adds 12g protein, so that meal would be 22g protein instead of 10. I also make pizza sometimes with low carb Touyfayan (?spelling?) pitas, between the pita, adding a little ricotta, mozzarella and the sauce they have 20g protein. Need to really plan.

I am 10 years out, and probably am not getting enough protein daily, this is true. I try, but have become so grossed out anymore over red meat, eggs, etc. I think because over the 10 years I've had just about all I can stomach... literally, and also because of the humane issues. I even hate admitting I'm not full vegetarian...yet.
 
I am allergic to shellfish, and haven't  eaten any fish at all since the early 1980s. I do take vitamin supplements though.

I haven't had any unflavored protein powders lately. I think I may need to try to focus on that. Usually the ones I have had are sweetened with additives, vanilla, chocolate, strawberry... I've had about every flavor of smoothie with added protein one can blend up.

I LOVE swimming. I have exercised in the pool for 6.5 hours so far since Monday, hard exercise, lap swimming with weights and many other weight routines, laps where I just use my legs, laps where I just use arms (with weights), so I am definitely getting in the most exercise I can do while in the pool, and it's starting to show with muscle, but right now I still have so much fat that I feel quite large and bulky. I am hoping the muscle will start burning fat, but how would I know? I've never been 'lean' before, ever.

Out of the water is a much more difficult story; bad knees, bad back, it's like night and day what I can or can't do.
WHICH as we know is also a weight issue. In the water there is much less weight, so for me to get off as much weight as possible is imperative.

If you go onto Pintrest and type in high protein vegetarian recipes a ton of stuff comes up, maybe that will help