[Elecraft] K3 AGC usage question

[Mike]

When I turn the AGC off, my audio sounds like the speaker cone is torn, 
either the external speakers or phones. It's very difficult to describe.

I made a .wav file using Windows recorder, with the mic held in front to 
my external speakers. It's a CW signal, with the 250Hz roofing filter. 
It starts with AGC on, then off then on again. It's roughly an S4 signal 
and S4 noise. I reduced the RF gain to aboyt 3 o'clock.

If someone can tell me how to make a better recording. please do.

Listen here. http://nf4l.com/k3agc.htm

Am I doing something wrong, or do I have a rig problem?

Thanks,

Mike NF4L