I work construction and went on a strict keto diet, I was losing ~1lb per weekday. I actually got stronger whilst on the diet, which I attribute to the increased testosterone that comes in after your body becomes adapted.
It's important to note that the Inuit used to live on an exclusive ketogenic diet, they also live in an environment that requires ~6,000 calories a day to simply maintain if living the traditional lifestyle.
What I found working outside whilst on keto and running into winter was that my body managed to maintain its heat extremely well and far better than previous years on a normal diet. I estimated my caloric use at between 4500-5000 a day by how much I ate and how much I lost.
As with any diet it's important to eat adequate protein and exercise. Protein is quite readily converted (very inefficiently) into sugar, and if you don't force it into ketosis you go into starvation and that's when you really risk muscle atrophy.
EDIT: Here comes the Pubmed!
http://www.ncbi.nlm.nih.gov/pubmed/23219108
http://www.ncbi.nlm.nih.gov/pubmed/17383270
TL;DR High protein diets increase kidney filtration rates; whether it causes kidney disease is inconclusive. Non-animal protein is preferable to animal-based proteins.
I would still not advise you to go over 2 lbs a week of weight loss (which if you do everything right, will be about 80% fat, 10% muscle and 10% water, give or take). Just because you eat more protein (or lift weights) doesn't mean your body won't trigger muscle breakdown. It will mitigate the amount, sure, but won't just magically stop it because of high protein intake. What most likely will happen, is your body will use protein for energy.
It is quite hard (only found one study that corroborates this (and it was with really untrained obese males) where there was actual muscle increase while losing fat (something along the lines of 2 kgs muscle increase and 9 kg of body fat lost over a period of 6 months I think), but interestingly enough it was a medium carb, medium protein, low fat diet. I'll try to dig up the publication when I can.
Also, do note that keto/low carb (and do note, that fitness keto is different from actual ketogenic diet, the latter being more than 85% of calories from fat) diets tend to produce quick weight loss at the beginning due to water weight and I still recommend to regularly have an high carb-eat at maintenance day to restore hormone levels and fill up the muscles with glycogen (and this will make you go up the scale 2-3 pounds). (ps: high carb day = loads of fruit, some rice, bread, not icecream+cookies+chocolate)
Good luck with your progress.
With my body at least, it seems that the difference between 2 lbs per week and 3-4 lbs per week is huge in terms of how much muscle is kept during the fat loss process.
If you're already hugely overweight than of course it doesn't matter and fast weight loss should be expected.
Care to share any suggestions how to accomplish this with a diet that actually tastes good and doesn't require too much preparation time? Most people seem to use yucky protein shakes or huge portions of ham or other bland food and I just can't force myself to eat such stuff.
I think that if your goal is just to be generally healthy, there's no need to eat that much protein.
From Amazon, $22 per 12 pack. 3 cans per day.
That plus eggs/omlette, bacon, sausage etc. for breakfast, sandwich for lunch and some kind of meat and veggies for dinner = 200g of protein easily.