Insulza, the OAS chief, flew to Honduras on Friday to demand that the interim government restore Zelaya.
Zelaya was removed from power as he was about to press ahead with a non-binding referendum on constitutional change.
The 35-member OAS had set Saturday as the deadline for the military-backed interim government to comply with its demands, or be expelled from the regional bloc.
But Honduras's interim government beat the OAS to it and on Friday renounced the organisation's charter.
Roberto Micheletti, the interim president, said the OAS was attempting to impose "unilateral and indignant resolutions" on the new government.
"It is better to pay this high price ... than live undignified and bow our heads to the demands of foreign governments," Micheletti said.
The interim government has also said it would arrest Zelaya if he returns to Honduras.
Despite this, Zelaya has vowed to return accompanied by regional leaders.
Cristina Fernandez, the Argentine president, will accompany Zelaya from Washington DC, the US capital, to Honduras on Sunday, an Argentine government source said on Friday.
"Tonight she's travelling to Washington. On Sunday, she'll leave from Washington to Honduras," the source told reporters, on condition of anonymity.
Rafael Correa, Ecuador's president, and Miguel D'Escoto, the president of the UN General Assembly, will also accompany Zelaya, the source said.
Lucia Newman, Al Jazeera's Latin America editor, said that several scenarios to solve the crisis had been proposed by OAS member states.
|Zelaya was ousted before holding a non-binding referendum on constitutional change [EPA]
"One of them is that this de facto government, as the OAS calls it, would issue a blanket amnesty that would annul the arrest order for Zelaya," she reported from Tegucigalpa.
"In exchange, elections [currently scheduled for January] would be brought forward. But the deposed president would have to be reinstated [pending the election's outcome]. I understand that this proposal was put forward by Argentina."
However, Micheletti's government has said that while it will consider bringing forward elections, it is unwilling to reinstate Zelaya for any length of time.
Newman said that the current crisis is the "biggest challenge that the OAS has ever had to face".
"There is absolute consensus in the international community that they have to use their diplomatic might to reverse this coup d'etat. There is consensus that this kind of thing can not happen, and should not happen," she said.