I think the consensus is that the insulation is not needed. There should be absolutely no issues if you just remove it.
or
If you're not worried about 'pretty', I've 'fixed' several on other cars in the past with pretty good results. Home Depot or Lowes should carry aluminum tape (for duct work) that's easy to apply & holds up well. This is probably the only application where Duct Tape (the fiber kind) can't fix it. That stuff will break down & fall apart in the hot environment of the engine bay.
Here's a thread where it's discussed:
http://www.vehicross.info/forums/sho...engine+blanket





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