Microbunching instability in the FEL driving linac is induced by collective self-fields such as longitudinal space charge, coherent synchrotron radiation, and geometric wakefields. Our simulations are the first start-to-end simulations including all important collective self-fields from the cathode to the end of linac. In this paper, we estimate the gain of the microbunching instability in TESLA Test Facility Phase 2 linac by applying current density modulations at the cathode, and describe several new smearing effects of the microbunching instability which are not considered in the analytical gain estimation formula.