Blue - Here's a link to a properly done transom rebuild through the rear skin.
http://www.classicseacraft.com/hammers20CCpage2.htm
Sounds like theres some large air pockets trapped under the outside skin of your transom. If the transom is solid and the wood is dry, then drill some holes into the skin in the "hollow areas" air pockets and inject epoxy resin to fill the voids. as for the crack . . . just grind it out and use a fairing compound to fill in the area.