The problem is that you're using a power mike with only four wires, hooked to a 5-pin mike plug.
The reason that radio has five pins instead of four is to provide two, separate ground connections. Pin 1 is for mike audio ONLY, and pin 4 is the receive/transmit switching ground.
If you use a six-wire mike, you'll have that separate "keying only" wire for pin 4, and the shield will go to pin 1.
Using just one of the two ground pins or jumping them together causes odd feedback problems. It has the effect of hooking the audio-only ground to the keying-circuit ground. The squeal noises you get are caused by what's called a "ground loop" between the two ground circuits. Some of the old 4-wire power mikes could be converted to a 5-wire cord, some couldn't. Until you can separate the two ground circuits, you'll get odd noises on receive, or transmit or both.
Bet it doesn't do this with the stock straight mike.
73