Do you get a squelch "thump" from the speaker spinning the squelch knob briskly from end to end? Turn the volume full up to be sure.
If so, this is not just an audio problem. If the S-meter won't budge on channel noises, the problem is upstream from the audio circuits.
Next thing I would do is take the digital manual signal injector and poke the IF filters.
Digital, as in your index finger. Lay it onto the shaft of a small screwdriver and poke the tip onto the circuit point you want to inject with all the stray RF noise your body picks up from your surroundings.
This should get you a rowdy noise level on the output pin of each filter, first the AM ceramic filter. Then the SSB filter.
Should be louder on the output side than on the input side of each filter.
If this works, poking the gate pin of the first mixer FET should be next.
For that matter, could this just be a case of tweakeritis gone bad? Someone who twists every tuning slug in the radio while laser-focused on the wattmeter? A little history can save chasing wild geese.
A local AM station's transmitter was located a couple of miles away for years. Their signal would be large enough to get detected through the radio's IF stage this way. Got funny looks from customers when I poked a radio and a tent-revival preacher's patter came booming out the speaker.
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