It's entirely possible you've gone into shut down. Your body can do an awful lot, but change from your previous calorie intake to about an eighth of that (going by my own previous calorie intake on an average day!) is going to affect it and you need to give it time to get used to doing just that before adding in other things for it to deal with, like the exercise. Week one you lose more as you liver and kidneys dump the water they hang on to as it changes from using glycogen for energy to using your fat (glycogen is stored in the body in 4 times it's weight of water) - so, firstly your body needs to get used to the change in it's energy supply. It's vital you get enough water in every day for all the fat burning processes to work properly.
When your body is still in the shock of the energy change, adding additional energy outputting activities (exercise) will shock it further. All your body knows is there ain't anything coming in like there used to be, and there is loads more going out, so self preservation kicks in, your body assumes a famine time and concentrates on the absolute essential processes for staying alive - burning fat is not one of them, and your body will seek to hang on to everything it can in case of no more food coming in. I'd consider ditching the exercise for now, give it a good few weeks, then add in some extra cals when you do exercise.
