Looking at the build pictures I took the past weekend it seemed that I had inserted the ground wire to Pin 25 of the Intercom backshell which is Audio Mix Com 1 and not a ground terminal. Removed the wire from position 25 and re-positioned to Pin 15 (Audio GND). Connected the Intercom backshell and powered the radio. After moving the Stereo/Mono switch of the headset back and forth I could hear normal volume (without the MON button pressed). I could also hear the sidetone. Tried the Co-Pilot side and the audio was also OK. Removed the Intercom backshell from the Control Module and secured the ground wire to the harness with self-fusing silicone tape.
Also removed the Options backshell and secured the extra wires with silicone tape. Re-installed the backshells to the Control Module. Turned the radio ON again and the audio in the headset is still working OK. I hope the fix is permanent. There is a slight buzz in the headsets but will worry about it later.