eaglemom,
First of all, congrats on the weight loss. That is an incredible accomplishment and you've already done tons for your knee, even though it may not seem that way. I'm so sorry you're having knee problems - welcome to a very friendly club of fellow knee pain sufferers!
I can't really tell you the best thing to do for your knee - that is ultimately up to you to decide (with the help of your doctor of course). If you're at all apprehensive about the OS's suggestions, there's no harm in getting a second opinion. The meniscus, in most cases, does not heal on its own so if it really is problematic, or becomes problematic in the future, surgery is really the only option here. Check out other areas of the website for more info about meniscus tears. As for the stress fracture & cyst, as that heals the pain should decrease and the cyst will probably reduce in size eventually. I would be more concerned about the cause of the stress fracture & cyst - is it due to some tendonitis? The region you mentioned sounds like it could be right around where your IT band attaches to the tibia. Did either of your doctors say anything about that? Maybe something to ask your doctor about.
Regardless of the direction you choose to go, I wish you the best of luck. Let us know how things go.
Sarah