Less than a month till my knee surgery -- I've been injured since May 2008, and banned from the saddle since September, when I really re-injured it by riding. I feel your pain!
If you have a loss of muscle mass, it's likely due to you not using it properly. If you're injured, you're likely to be walking differently and not using that leg as much as you could/should, which has resulted in a decrease of actual muscle in your leg - mine is currently very weakened as I can't even walk on it much at this point.
My first suggestion? Go see a GOOD physiotherapist. A lot of knee issues can be resolved with physiotherapy - but you HAVE to be diligent about the exercises they give you. If there is excess fluid, your GP might want to drain it, or just use PT (physiotherapy) exercises to decrease the swelling. Mine is now chronically swollen due to the damage (that we think is there - nobody knows what's wrong with my knee!)
Talk to your GP, Orthopedist, and physiotherapist, and see if they think if there is any significant damage; if so, the next step is diagnostic imaging (an MRI is very common) to see if there is damage, and if so, what and how bad. Then you can discuss things from there :)
Good luck, and feel free to PM me if you have any questions.