The exothermic dihydrogen and methane loss channels for Co+ reacting with propane, propane-2-d1, propane-2,2-d2, propane-1,1,1-d3, propane-1,1,1,3,3,3-d6, and propane-d8 are examined. Measurements of the Co+/C3H8 system with a guided ion beam apparatus yield a total cross section that is 13% of the Langevin collision cross section, with H-2 loss favored over CH4 loss by a factor of 2.4. For Co+ reacting with C3D8, the total cross section decreases by a factor of 2.8 relative to C3H8, but the branching ratio is unchanged. These results can be accommodated if both CH4 loss and H-2 loss proceed via an initial C-H bond insertion that is rate limiting. Modeling with statistical phase space theory indicates that the barrier for C-H bond insertion is located 0.11 +/- 0.03 eV below the Co+/C3H8 asymptotic energy. Kinetic energy release distributions (KERDs) from nascent metastable Co(C3H8)+ complexes were measured for H-2 loss and CH4 loss. For H-2 loss the distribution is bimodal. Studies with propane-2,2-d2 and propane-1,1,1,3,3,3-d6 indicate that both primary and secondary C-H insertion are involved as initial steps. Initial secondary C-H insertion is responsible for the high-energy component in the bimodal KERD which is much broader than predicted from statistical theory, indicating that a tight transition state leads to the final products. The low-energy component for H-2 loss involves initial primary C-H insertion and appears to be statistical, suggesting little or no reverse activation barrier as the system separates to products. The kinetic energy distribution for demethanation, on the other hand, is narrower than predicted from unrestricted phase space theory calculations. Inclusion of the C-H insertion barrier into the calculation brings experiment and theory into excellent agreement. The barrier reduces the contribution of high angular momentum states to the final products, thus reducing the high-energy portion of the product kinetic energy distribution. This is the first documented example of a transition state remote from the exit channel strongly affecting product energy distributions.