Masturbation: Does it break the 3rd precept? According to this  answer, it seems like masturbation is not considered sexual misconduct or breaking the third precept.

However, the whole point (in general) of keeping the precept is to make good kamma both in mind and body. Masturbation alters the mind state and creates bad mind-made kamma. So ideally, shouldn't it also be considered as sexual misconduct and breaking the third precept?
Argumentation is a tricky thing; it's easy to skip a step and before you realize it, you've got an argument whose premises don't actually necessitate their conclusion.

Premise: The whole point (in general) of keeping the [third] precept is to make good kamma both in mind and body. 

Premise: Masturbation alters the mind state and creates bad mind-made kamma. 

Conclusion: [Masturbation should] also be considered as sexual misconduct and breaking the third precept.

I'm not sure if you actually meant that the point of keeping the precepts in general is to make good kamma, or just the third, but either way, whether this premise is true or not, it doesn't necessitate the conclusion. We can see this by substituting the word "masturbation" with "consensual sex", "gambling" or even "dancing" - just because an act is unwholesome doesn't mean it violates any of the precepts, let alone the third.

You might have a better argument if your second premise pointed out that masturbation created bad karma relating to sexuality; we can maybe assume this was implied as obvious. Still, if masturbation is breaking the third precept, why is not consensual sex, or even romantic kissing or fondling? 

The third precept does not cover all unwholesome activity relating to sexuality, just as the first precept does not cover all acts of violence. They are specific rules designed to keep people from breaking a basic moral code that would otherwise lead them to be reborn in the lower realms.

ANSWER: So, while masturbation may be unwholesome (and a cause of addiction), it does not by any means break any of the five precepts. It does violate the eight and ten precepts, and is a major offence against the vinaya for a bhikkhu.