Yes, you can build muscle on a 300-500 calorie deficit. Protein needs to be 1 to 1.5 grams per pound of lean body weight. (for you at 171 and 18% bodyfat that means your lean body weight is 140). 140 grams of protein @ 4 calories/gram = 560 calories. 210 grams of protein = 840 calories. With a BMR of 2900 (I wish I had your metabolism or youth, lol) 560 calories is only about 19% or your calories and 840 are about 29%. I only point this out to show you that your 50% protein diet may be excessively protein laden. Since protein is some of the most expensive food to buy there is really no reason to beyond the 35-40% range.
I have never been an advocate of bulking and then dieting back. Since you always lose some muscle during the diet phase it is (in my opinion) not the most efficient, albeit perhaps the fastest way to get in shape. If you are looking for long term fitness, health and a body that you are happy with I would not bulk and diet. I prefer to take the approach that you are making a lifestyle change for the long term. You eat healthy, you exercise and you achieve the body image and fitness level you are comfortable with.
For exercises you need to lift heavy! (Weight appropriate so you can only perform 4-6 repetitions per lift, 3 to 4 sets of each exercise.) Studies have shown that 4-6 reps build muscle mass faster than 8-10(which builds strength faster) or 10+ reps that build endurance faster. Since you are already in decent aerobic condition and you are more concerned with shaping your body go with the lower 4-6 repetition range for every lift. (The exception here is the Abs which have been shown to pop best with higher reps).
As for a routine you can look at my posts in the 'Did you exercise today?' thread in the Exercise section. I perform a 3 day split. Meaning that each day a different muscle group is targeted. This allows those targeted muscles to rest and repair the other two days. My splits are: Chest & Back, Arms & Shoulders and Legs. I do Abdominals almost everyday and cardio is a 5 minute warmup before lifting and 35 minutes post weights. Bodybuilding.com has a forum section with suggestions for a lifting routine. Don't overlook the importance of rest for your muscles. The old saying is you grow muscle between workouts.
Eat clean, carbs should come from vegetables and some fruit. Restrict simple carbohydrates from white flour, white bread, white rice, fruit juice, sugar and most importantly alcohol. (Alcohol has 7 calories per gram.) Instead use Whole grain bread, brown rice, whole fruit and sugar substitutes like stevia or honey.
You can make a huge change in your body in 6 months with dedication to a clean diet and a weight training regimen.
Male, Age 53 Height 5'-11"
Start, Spring 2009....,.. 270.0 lbs
January 21, 2010. ....,...255.0 lbs (Joined Fitday)
September 10, 2010..,..223.8 lbs. (-46.2lbs)
Mini-Goal......................225 Achieved 9/21/2012
Mini-Goal......................220 Achieved 10/26/2012
Current.........................216.2 lbs. (-53.8 lbs)
My log: http://www.fitday.com/fitness/Public...Owner=rpmcduff