Steroids increase the appetite, they eat more, they gain weight. As M&E said, 17 lbs is pretty hefty and may be a significant contributor to the lack of grooming.
While diarrhea can be a side effect of steroids, it's not really all that common. Since you mention that feeding Friskies treats makes the diarrhea worse, it seems that she is sensitive to something in them. That could very well be the case with the food as well.
The use of fiber is fine for both filling her up and for helping with the diarrhea. Fiber will help normalize poop whether a cat has constipation or diarrhea.
My suggestions would be to get her on a higher quality food, something with no corn, wheat, soy, by-products etc. Many of the weight loss formulas are high in fiber to help fill her up. Something like Natural Balance Fat Cats actually has more fiber than the W/D.
Oh....and if you're free feeding...don't. Measure her portions.
I also recommend that you get some wet food in her diet. There are plenty of non-pate options available. Again...high quality, no junk fillers.
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Holly, Misty & their friend, Jake, the dog.
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