Listen everyone, this will be the most important news you will hear about this. I found a solution that is so simple it hurts.
1. Open the avi file with quicktime
2. Then click File – Save
3. Save the file as a self-contained movie
This does not recompress the video, it just changed the container from avi to mov and the filesize should be the same.
Now you will be able to edit your camtasia files in Premiere with EASE!
Yes I do accept tips! :p