You can turn your own engine volume down under Options/Preferences/Game Sounds/Advanced. I need to do this too - I'm using the Sick Puppy sound pack and in the P-38, I set my own engine at close to 10-15%, just so I can hear the radio chatter.
The audio problem sounds like it could be a driver issue? Have you checked to make sure the correct microphone is selected in Game Sounds? If you have a monitor that contains a speaker, I think I recall that the HDMI driver for monitors withe speakers causes a problem...