Chris, Just want to say first of all don't panic. If you read here on the boards you are certainly not alone and nothing I read here or have heard from my doctor implies that it is life threatening or something that cannot potentially be reversed.
I was told the same thing about my liver last week. I am 35 years old, have about one drink every 6 months and can stand to loose maybe 20 lbs or so. I went on the Atkins diet back in July 03(high protein, high fat, low carb) and now being told that the high fat diet can be the cause of this 'fatty liver.' I had my sonogram this past Friday and the radiologist said I had a 'borderline fatty liver.' My doctor has since taken me off the Atkins diet and put me on a lowfat diet for the next few weeks, only to take blood again to see if my ALT and AST levels are dropping at all in November (mine 2 weeks ago were AST 52 ALT 161!)
I was fine with normal blood tests until I started the Atkins diet ... maybe your diet can be doing the same?
Before you panic, read more on this board .. it helped me feel better and gave me some ideas (for example, Vitamin E) that hopefully will help, or at least some questions I can ask my doctor about.
Good luck, I certainly know what you are going through