Hello Goodkid,
You are doing really well.
Avoiding, distraction is a good tactic.
I'll share a little bit about my own recovery--I think you'll find it helpful:
At first I thought the problem was looking at p*rn, and m*sturbation; I was trying not do do these things, but I fell often.
Then, I learned to keep an eye out for those things that lead to m*sturbation. At first I noticed those actions--if I sleep a certain way, I'm sure to end up acting out.
After a while, I noticed that the slippery slope really started much earlier--I was feeling restless, irritable, and discontent about something in life. More specifically, I was angry for what someone did to me, or afraid of what might happen in the future.
These ill feelings could last for days or weeks but, eventually (and inevitably) I'd act out in order to feel relief from them.
That is, until I moved along in recovery. I learned new and healthy ways to deal with these feelings, and to deal with the difficulties of life.
So, I still struggle, but I'm fighting with these subtle feelings and learning to let go of them--and (usually) LONG before acting out is anywhere in sight.
On another note, I was wondering about the insomnia you mentioned. Knowing nothing about you and being totally ignorant, I would just throw out an idea--perhaps the problem isn't falling to sleep so much as it is in not having a regular sleep schedule. Or, perhaps you are eating something before bed-time which makes it hard to fall asleep. There could really just be some simple factor contributing to the problem (I was having trouble falling asleep for a while when I noticed that if I drink coffee past 4 in the afternoon, the caffein is still in my system keeping me awake well into the night).
Also, about not fighting this addiction. I have found that it's not something that can be explained or even makes sense. It's sort of like trying to explain to the uninitiated the benefits of learning Gemara. You just have to do it, and then you'll see. So, just give it a try and see what happens (it doesn't cost anything). Turn to G-d for help, "Please G-d, take this lust away from me!" Or, "Please, G-d, whatever I am looking for in this woman, please help me to find it in You instead!"
Lots of luck,
--Elyah