Limbaugh himself refered back to the previous day's discussion of fake soldiers shortly after the comment in question about phony soldiers, immediately after he got off the phone with Mike O, and read again from his previous day's story about the fake soldier, Jesse Macbeth.  MediaMatters left that completely out of their partial transcript.  

Instead MediaMatters reached back much further and immediately inserted 6 paragraphs about the seven soldiers who wrote the August 29th editorial in the NYT.  Was that part of the immediate context? Who knows, maybe the caller and Rush were thinking about these soldiers, but there's nothing in their conversation about this.

When you say "much further along in the conversation," do you really know how much later it was?  What was it, something like a minute and a half?  During which time Mike C was going on about WMDs and Limbaugh was trying to tell him that was a moot point.  So immediately after Limbaugh dismisses Mike C, he goes back to the topic of "fake soldiers" and re-reads a segment of his previous day's story about Jesse Macbeth, one of the "Phony War Vets" and "phony heroes" discussed on ABC News the night before.

The part Limbaugh left out of his tape or transcript contained no relevant material to support MediaMatters' interpretation of Limbaugh's words, but I completely agree that it hurts his credibility (if he has any) that he left it out and only later explained that he had cut extraneous material "for space and relevance reasons."  It's really hard to say if Limbaugh is more dishonest or more stupid.

I actually think both Limbaugh's interpretation of his own words as well as yours are rather forced in part because neither can be proven.  You believe that Limbaugh's caller and he were using the term phony soliders to describe any solider, including Mike C, who opposes the Iraq war.  It's certainly possible that they have this in mind when they use the term, but it's not clearly indicated in the text that this is the case.  When you want to argue that it is, you actually confused the callers in your mind and say that Limbaugh was denying Mike C's claim that he proudly served 14 years in the military.  But Mike C did never made this claim--it was Mike O who made this claim.  Limbaugh was primarily doubting that Mike C was a Republican and Mike C only threw in toward the end that he also used to be military.  Limbaugh barely refers to this claim at all and again goes back to dispute his claim to be a Republican.  He does not acknowledge that Mike C was an Iraq soldier but a bad one because he opposes the Iraq war, he dismisses the factualness of Mike C's claim to be a Republican and that he used to be military.  In that regard, you claim Limbaugh is making a generalization about a particular case, but particular case is not the same as the generalization supposedly derived from it.  So your argument from the case of Mike C is flawed in two respects.

Nonetheless, it's quite possible that you know what Limbaugh had in mind when he used the term "phony soldiers" but it's merely an interpretation.