[Ron Ramirez]

Jerry, please, patience is a virtue. It's the weekend and a lot of us, myself included, are busy. And I have to work tomorrrow.

Anyway...

You are correct, the metal "ring" with the long tab as shown in your photo is part of the radio's muting mechanism. Normally there is another fiber insulator on top of the ring, with a very small tab which only covers the part of the metal tab closest to the ring part of the piece. Just as Phlogiston described, and I think he did a better job of describing it than I did. Without this insulator, the set will stay muted all of the time.

If it isn't muting, then something is keeping it from muting. Maybe some dirt or a foreign object keeping the muting circuit from grounding properly? Maybe it isn't connected properly? Just some random thoughts.