MFP estimation doesnt seem possible...

So I changed my workout goal to be 7 days a week, and aiming to burn 500 calories each day. I know that is an insane amount and very hard but I'm setting my goal high to push myself, because even if I only do 250 that day I will have done something good. My problem is I changed my weight loss to be 1lb a week whereas before it was 2lbs a week. So after setting that goal up MFP tells me that I will lose 5lbs in 5 days.....um thats not really possible unless I'm losing muscle as well as fat and water weight. Does this seem at all possible to anyone or has MFP just got a really weird way of calculating things?

Side Note:I upped my workout goal and lowered by weight loss rate only because its been 4 weeks and I gained 7lbs. While it may be just water weight from 'that time of the month' its still discouraging because it means I didnt lose any weight, and now I have added water weight. My one saving grace is that I have lost 3 inches off my thighs which is something I do really need and want, but otherwise I still cant fit into my jeans I think that MFP gave me too low of a calorie rate and I've been hurting myself instead of helping myself. They told me I should take in 1250 when my BMR is 1429, thats a whole portion of food that I have not been eating. And now I'm ranting and rambling so I will end this on a positive note of 'I will not give up because of this, I am only MORE determined to lose fat and get fit!'