Did you gain 4 pounds of mussel or fat? It is not uncommon to gain weight when increasing your level of activity in the the short term. Long term, if you have reduced your caloric intake below what your body needs you WILL loose the weight.
http://www.diabetes-book.com/index.shtml
You say low carb but you don’t say how many grams of carbs is low for you.
I have been type 2 since March of 2007. I have been up and down in weight because of limited exercise capabilities. I started on Byetta for 18 months and then went to MDI insulin my last 3 A1C’s were 5.9 Nov 2009, 5.5 March 2010 and 5.7 July 2010. My Endo put me on Victoza on July 21. I think you got the 4lbs I lost since July 21.
I take one shot at 6pm each day and if I need Novolog(fast acting insulin) I shoot to adjust to 100.
I do NO CARB/Low carb I try to stay below 20gm of carbs a day.
I truly believe that Victoza will have me to a point that I can take just one shot a day and test 1 to 3 times a day. I would consider this a major victory.
The walking you helps reduce your insulin resistance keep it up. If you don’t believe me don’t walk for 3 days and do everything else as you normally do. After 36 hours since your last walk you should see your BG readings going up 10 then 20 points. I believe that this is the results of insulin resistance increasing.
You will have good days and bad days. Good luck
You will get all different kinds of view points on this and other websites. Keep what you like and discard what you don’t like.
JNH:
First, you are not alone. There are lots of T2’s on this board, like me! 
I have not totally given up cigars, though. I did cut back to a couple a week. 
I lost 80 pounds after I was diagnosed, by diet and exercise. I found that my weight would ping pong as much as 3 pounds when low carbing and excercising heavily, but it started trending generally downward and I ended up losing 80 pounds that way. I believe that the ping pong is caused by gaining muscle (up) then burning fat (down) over and over if you are excercising a lot. Freebie hint: Don’t weigh every day. Try every third day. You will catch more of a general “trend” that way as opposed to a “ping” or a “pong.” I found weighing every day to be VERY discouraging when I would have eaten dead on diet, walked 6 miles, and then gained a pound. When I went to every third day, it was a lot better for me.
By all means, keep fighting the good fight and running the marathon! I know it is bewildering at first, but as you learn what and when you can eat, it gets better and less scary. Get Dr. Bernstein’s book. Even if you don’t totally adopt his WOE, it is great information. If I can help in any way with info, or cigar-solidarity, just let me know!
Mark