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It's exceedingly hard to diagnose noises from long distance. So I can't say for sure what the culprit is. However, I would be inclined to believe your mechanic. If you decide to go the transmission rebuild route, here's some food for thought.

Scott (KLR3CYL) and I specialize in rebuilding Insight transmissions. I'm confident in saying nobody does it better than we do.

Every transmission gets completely disassembled, thoroughly cleaned and inspected. We replace all of the bearings. We do the 1st and 2nd gear syncro tab-ectomy. This permanently fixes the downshift grind issue. We restore the ball detents on the shift forks if they are excessively worn. There's more, but you get the idea.

We also do core exchanges where we send you a fully rebuilt transmission and then you send us your original transmission back.
 

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Instead of sending me a PM, Willie hijacked your thread with a message to me. Must be those new meds. 😁

LRR is Willie's turbocharged Insight a.k.a. the "Little Red Rocket".



The Airbox bushings being shot is no surprise. You can still get news ones from Honda, or go out to pick-a-parts and scavenge them off of other Hondas.
 

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Back in 2015, I removed the transmission on my 2006 Insight at home with my dad's help. We lowered it down with a floor jack. The manual transmission weighs about 60 pounds. It is isn't unreasonably hard to manage.

The axle nuts are 32mm. If the car is already on jack stands, you can have a helper apply the brakes while you loosen the axle nuts with a breaker bar.

Edit: If you would like to go with the high quality, tried and true, we have a few Exedy KHC11 clutch kits available.
 

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The more I look at those pictures of that clutch disk and pressure plate, the more I am convinced it's not the correct item for your Insight. Here are some pictures a genuine Exedy KHC11 clutch kit.

Furniture Table Gas Font Electric blue




Automotive tire Motor vehicle Crankset Bicycle part Gear

Clutch disk diameter is roughly 7.5 inches.

Table Shipping box Office supplies Office equipment Box

The release bearing.

Automotive design Office supplies Audio equipment Gas Writing implement

The clutch alignment tool says HONDA on it.

Office supplies Pen Tool Material property Automotive tire

The pilot bearing you have is wrong. Also, the your clutch disk alignment tool doesn't look right.

Automotive tire Alloy wheel Automotive design Rim Spoke

The relationship between the three dowel pin holes and the six mounting bolt holes on your pressure plate don't look correct.

Automotive tire Rim Bicycle part Machine Engineering



Automotive tire Alloy wheel Rim Auto part Machine


Automotive tire Rim Automotive wheel system Auto part Wrist
 

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There are six bolts that hold the transmission to the engine. The upper four bolts have 17mm hex heads and the two bottom ones have 14mm heads.

The trickiest one is high up on the back side of the engine under the exhaust manifold section of the head.

FadedBlue, you have my phone number. Please feel free to call me if you have any questions while working on your Insight.
 

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Passenger side motor mount is kind of a pain, but it is entirely doable.

I was talking about the rear main (crankshaft) seal. I don't know if there is a guide on the forums that shows replacing this.

At any rate, if you would like to pursue doing this I will be happy to walk you through the relatively simple process. Pulling the IMA motor off the engine is not difficult...unless you try to do it the way Honda describes in the service manual. You don't need any exotic tools to do the job.
 
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