The symptoms you describe the issue with usually occur when there is air in the system, if there is air in the system, bleeding it out would fix this, but if you are losing fluid, it will come back as soon as the clutch system picks up more air. I don't know if clutch masters have rebuild kits like brake master cylinders do, and if one is available for this car, if they do exist. It might help if you can find where the fluid is coming from.

...either way, pumping the clutch isn't going to bleed air from the system, air compresses and fluid does not, which it seems you've got air in the clutch line. If bleeding the master and slave cylinders doesn't solve your problem there could be an internal hydraulic leak but I don't think that is the problem in this case.

 

Honda Instructions:

Bleed the clutch hydraulic system.

NOTE: Be careful not to damage the slave cylinder by overtightening the bleeder screw.

Attach a hose to the bleeder screw , and suspend the hose in a container of brake fluid.

Make sure there is an adequate supply of fluid at the clutch master cylinder, then slowly pump the clutch pedal until no more bubbles appear at the bleeder hose.

Tighten the bleeder screw to 8 N•m (0.8 kgf•m, 5.8 lbf•ft); do not overtighten it.

Refill the clutch master cylinder with fluid when done.

Use only Honda DOT 3 Brake Fluid from an unopened container.

Check clutch operation, and check for leaking fluid.

Sorry, I can't attach the picture that goes with these instructions.
But it sounds like you've got a leak too.

 

Also,
Honda changed their recommended M/T oil in 2007.

"Honda Service News" Jan 2007

Stiff Shifting, Popping Out of
Gear? Replace the MTF
NOTE: This article applies to all M/T-equipped
Honda cars and trucks.
We’ve heard reports of customers complaining
about the M/T shifting stiffly or popping out of
gear. In each case, the M/T was using aftermarket
MTF or old Honda MTF. If you’ve got a vehicle in
your shop that fits this profile, try draining the
MTF and replacing it with new Honda Genuine
MTF (P/N 08798-9031, H/C 8429094). This new
MTF offers better overall shift quality in cold
weather (especially in freezing temperatures), and
it’s got better friction reduction for improved fuel
economy and longer transmission life.
After filling the M/T with this new MTF, take a
10-mile test-drive around town so you can do a lot
of shifting. If you’ve still got this problem after
your test-drive, then it’s time to do some troubleshooting

 

Here is a closeup of that shaft that comes through the firewall and attaches to the clutch pedal.

Also, Here is a closeup of some sort of grounding wire on the right side of the engine bay in front of a fuse box I think. Bought a piece to remount the wire but haven't done it yet. What is it grounding exactly?

 

Grounding straps

Also, Here is a closeup of some sort of grounding wire on the right side of the engine bay in front of a fuse box I think. Bought a piece to remount the wire but haven't done it yet. What is it grounding exactly?

There should be a second grounding strap nearby as well. It would be wise to check it as well.

These straps electrically connect the engine and transaxle to the chassis which is the grounded side of the 12 v. electrical system. The engine and transaxle can be fairly well isolated electrically from the chassis by their rubber mounts, yet many engine and transmission sensors, ignition system, etc., use the engine or transaxle as electrical ground.

Corroded or broken ground straps can cause weird and possibly intermittent electrical problems, so it is wise to fix the ground straps.

 

Looks like a classic clutch master cylinder failure. I've replaced them on the last 3 Civics I've owned. Same symptoms and fluid leaking around the shaft.

They were pretty easy to replace on the Civics. I don't see why it would be any different on the Insight. Just 2 nuts and the pin under the dash, and the fluid lines under the hood. Bleeding it is a pain, but follow the instructions posted above and you'll be fine.

 

So, as it turns out....it hits me one day that I did the exact mistake I made last time I was having problems putting the shifter in gear...I checked the brake fluid reservoir for fluid instead of the clutch reservoir. I decided to replace the clutch master cylinder and slave cylinder anyway because the fluid was gone and I figured this was due to a bad clutch master cylinder. (see picture above). Anyways...took me a bit of my day today but I replaced both parts and bleed the system. Took it for a quick drive around the block because it is late, but noticed that the clutch engages around half way up its travel path. I was thinking that I just need to adjust the bolt on the back of the clutch pedal. I read in the manual that the clutch is self adjusting for wear and I figured the old master cylinder was adjusted for that level of wear but the new one I just put it is not. Let me know if I am on the right path. Car is drivable by the way.

 

Great job on the DYI.
Here's the clutch pedal specs according to Honda.

Clutch pedal
Height from the floor
192 mm (7.56 in.)
---

Stroke
130-140 mm (5.1-5.5 in.)
---

Play
10-18 mm (0.39-0.71 in.)
---

Disengagement height from the floor
89.0 mm (3.50 in.) max.
---

 

i broke something just beneath my clutch, question, can i buy parts individually or should i just replace the whole clutch kit?

 

You can procure individual parts, What Broke?

Willie