playing "armchair technician"
just checked out the schematic to that radio.
so with a regular mic plugged in, does the PA work?
loud audio there? and receiver audio in the speaker?
If yes, then maybe a problem in the ALC circuit.
for TX modulation, and that audio ALC circuit.
turn RV102 to maximum resistance for less or no ALC.
and check negative limit diode VC6C.
the modulation audio passes through it.
check them capacitors C204 and C210.
maybe inject audio at the junction of R168 and C195
during TX. this is where receive audio is injected.
And to be able to maybe overmodulate,
bypass the neg limit diode VC6C.
cut out ALC clamp transistor Q121.