Hi pete, thanks for the reply.
I'll be sure to try the 10uF cap from pin 1-8.
I am not using a power supply for my sustainer, I'm using a standard 8-AA battery clip (which fits quite nicely in my LP control cavity). Interestingly enough, over half of the current draw when idle is coming from the LED, haha. When actually sustaining, the max current draw I've measured was 130ish mA. I don't think I'm putting too much current through the coil.
It seems that with this particular chip, the higher the resistance across pins 1 and 8, the higher the gain. It also makes sense that it works that way because, if you look at runoffgrooves page about the amp, you can use either a 1k, 2k, or 5k pot for the gain control, with the higher pots giving more overdrive. My plan is to get a 1k or so pot, set volume control to max, and adjust the gain to get the loudest possible clean volume as per runoffgrooves advice.
I did use a test driver and a test circuit before I mounted it all in my guitar, and everything seemed to work alright, even directly over the neck pickup. My problems lead me to believe that it is something with the circuit. My stepfather noted that the circuit seems rather unstable -- one moment it will give me one result, the next time I try it, it gives a different result.
I have a feeling that I need to reduce the gain control. I feel that that is where the distortion is coming from. The squeal is almost like the microphonic squeal you get when you turn on a ton of distortion and place the guitar an inch from the amp speakers. If the distortion is off, it wouldn't feedback that close to the speaker.
Here is what I will do:
1. Adjust the gain for maximum clean volume to see if that takes care of the problem.
2. Place a 10uF cap from pins 1 to 8.
3. Try repotting the driver.
4. Look at other mods to the circuit.
5. Rewind the driver.