That's correct, you're reading how much voltage the battery is drawing, not how much it's going to put out. I'm not sure if you can check the batteries output while it's chargeing, maybe one the electronics experts around here can answer that.
I also estimated that slightly more than 2 charges would fill a 50mah cell, but if you read this
Peak Charged post that TinyRC made, you'll see that his 50mah cell actually took 78mah. That's why I go ahead and give my batteries 3 charges. The batteries aren't getting warm, so I think they can take a bit more.
I'm going to try the stock cell right now, and see what happens. I'll keep you posted.
Dave