Hello mate,
I'd like to say that I spent hours and ... actually two days with the same problem you are facing.
I have the same stereo as yourself, and also the Nokia Car Kit, though mine is the 112, it works on the same concept.
I installed the kit my self, and therefore I know you can mute it, mine does, and it works a treat.
What you need to do is ....... find the second block (the one with less wires in it) that's where the mute output is.
When I installed mine, the mute output was actually blank, so what you need to do is, get a voltage meter .... find the second block (with less wires in it) and poke the meter into the blank slots, and find one that give you an output of about 4.5 - 5V , that's the MUTE output.
Then simply connect the YELLOW mute cable from the car kit to that pin, and your done !
Hope that helps, I have images of the blocks, etc too ... if you want them.