Your pain might be ITB Syndrome
I got this in spring of 2003 after I ramped up my mileage very quickly and did my third century in a month. Mine was only in one leg. Lowering my saddle helped me(even though it was also lower than recommended already, as you say yours is - now it's even lower, but I don't have ITBpain!), as did specific stretches that a physical therapist showed me after my diagnosis. Also cutting back on the riding, using easier gears, avoiding hills, and doing less mileage for awhile. It took about a month to heal completely, and I have kept up the stretching and have never had a recurrence.
ITB syndrome is an outer knee pain involving not a muscle, but your ileo-tibial band. I knew nothing about this until I had it.
Check here for more info:
http://www.time-to-run.com/injuries/thebig5/itb.htm
There are many more sites with info; just do a google search on "ITB Syndrome". Most of the sites primarily focus on this being a runner's problem, but it can happen to cyclists as well.
Good luck!
Emily