have u measured yourself? It's not likely that fat is moving to your stomach--more likely that you're loosing fat in other areas first (due to genetics, etc) and if u stick with the diet, u will then begin to loose fat off of your stomach. I have a similar problem--lost it in my thighs and arms....look incredibly lopsided but things are adjusting and will eventually even out (so i've been assured)
um, the stress/breathing thing is not good--i don't think its related, but i would get it checked out!