ok im not too sure how its affect works but ill say what i think it is, if im wrong please correct me TY

ok lets say i attack a defence monster tat has a def of 1000

soo i would lose 600 LP because IFL's atk is 400

then after, i activate her affect. does that do 3000 to OPP? does that work??

so in the end i lost 2600 and opp lost 3000??

No, you activate the effect before battle damage is inflicted. If you attack a defense position monster with 1000 DEF, and you activate Injection Fairy Lily's effect by paying 2000 life points, her ATK is increased by 3000. So in the end it is a 3400 ATK monster vs a 1000 DEF monster. The defense position monster is destroyed as a result of battle, but the opponent doesn't take any damage because his monster was in defense (unless some other card effect like Fairy Meteor Crush is in play).

So in the end, you lost 2000 life points, your opponent lost none.