If you look at the staging guidelines, you're clearly stage III. I think clinical staging is relevant only until pathology becomes available and then clinical staging defers to the more accurate information. This is a long PDF document but on page 52 the staging guidelines and discussion begin:
http://www.nccn.org/professionals/ph...PDF/breast.pdf
These guidelines came out a few years ago - maybe your oncologist is not using the new ones yet? The new guidelines have much more to say about micromets to lymph nodes, and they also changed staging considerably depending upon number of positive nodes.
Debbie Laxague