Did you disconnect the inside wiring when you did the NID testing?
With a modern NID, that happens automatically when you remove the plug from the jack inside the box. This is likely the style he has, since he is (seems to be) plugging in regular phones to test.
Different makes of phones might explain it. But if you have the
> problem with the inside wire disconnected, I'd call the phone company
> before worrying about cascading effects.
I absolutely agree with that part. Also there is usually more ambient/background noise outside.