Ok here is my update:

Removed the radio mute connection between hands free kit and Empeg. I have verified that the AUX in on my Empeg is ok with another RCA source. I have also verified the speaker with the hands free kit using my laptop (just hooked it up to my head phone and could play a song through it). I have also tried 2 differnt cables between the hands free kit and the AUX in on the Empeg and get the same results. As soon as I make a call I hear a pop and then nothing. I have to remove the Empeg from the sled just to get sound back for the radio/mp3.

Now what I "learned" is that if I remove my 1/8" to RCA cable that connects my hands free kit to my Empeg and place a call, then turn on the Empeg and switch to AUX mode I can hear the call no problem. However as soon as I hang up and then try another call I get the pop and no sound. I then have to remove the Empeg from the sled to get the radio/mp3 sound back but the phone will not play through the AUX input.

So any ideas?