116 isn't outlandish. Typically diabetics in your physical condition progress pretty quickly as they usually turn out to be type 1.5s. Type 2's are typically insulin resistant due to combinations of genetics and metabolic syndrome (no I don't wish to debate this in this thread!). You don't fit the typical slow progressing profile we see here. But of course we're not doctors.
I'd ask for a Hemoglobin A1C test. It's a measure of your longer term sugar levels. It's what we all use. If it's pushing 6, I'd be concerned. If it's closer to 5, pfft!
Improved glycogen stores triggers alarms with me re the "dawn phenomenon." It may be a simple case of you having a freakishly high DP that's raising your fasting numbers. I'd also like to see your two hour post prandial readings for each meal. Do you have a glucose meter?