I was wondering about this too. Back in 2003-2004, I was trying to fit in with the guys I hung out with. I was 5'4" tall and started out at 140lbs back then. I ended up at 176lbs and only cut back my body fat to 7%. Needless to say, I looked buff. But, these days its almost impossible to tell that I ever set foot in a gym-to bodybuild. My method was a lot of cycling and later, jogging. If your diet is right and you do the right exercises at the right intensity, over a period of time, you can loose a ton of muscle.
I still need to lose muscle from my arms though, my biceps and triceps are still too defined and large for me to be comfortable.