Can't assess your precize problem, but FM transmitters always get back feedback as far as static is concerned. I'd consider a wired installation with one of the available FM modulators: http://www.cleverandeasy.com/Multimedia/scosche-interference-free-fm-transmitter-for-your-ipod.html
I just bought a Toyota Sienna and they installed a Video Stream Technologies overhead DVD player (VOH-952DV) in the car.
It uses the FM station to play the DVD through the car's radio. It links to 88.7 I think (we have it on a preset); the station has half static and half music.
The problem is that sometimes the audio comes through the radio and sometimes it doesn't. The DVD is playing and it seems like the audio should be working.
I'll take it back to the dealer if I need to but before they just start doing random things, I was wondering if anyone had an idea why this would be happening?