Transom Swells about half an inch

[tsubaki]

I haven't read the whole thread but what appears to be going on is the wood used may have been pressed or partical board. This would account for the swelling and shrinking. Letting it dry, removing the cap epoxy and resealing will not fix the problem. Water will wick from the bottom voids and do the same thing. Replacement will be necessary but dosen't appear immediate. Replacement is not as hard or as expensive to preform as most people feel. Just decide if you want to replace with wood, epoxy or fiberglass. Looks like you got plenty of time. Did you do a transom bounce test?