Hm, I don't have a 7.1 copy running, I run the latest version (7.2.2 at this time).
Basicly all there is to it is adding that
"island_insert" => & $island_insert, in the $smarty_data = array(
But ehr, 7.1 could be your show stopper anyhow for this simply hack. If I remember correct, the joined post_side.tpl and post_top.tpl which is used to display posts in both flat, threaded and private topic mode was introduced in 7.2
I would recommend an upgrade to 7.2.2.