On top volume & top drive with nothing plugged in it feedback

Turn your guitar away from the amp's speakers. The pickups on the guitar are feeding the amp's signal back into the amp creating a feedback loop, especially with the gain button on. Loud volumes cause this looping path between the amp speakers and guitar pickups. You may need to reduce amp volume also.

Plug the guitar on the "power amp in" jack near the "presence" knob.
If you get sound, you have a problem on the preamp. If not, it´s probably on the power amp section.

Its a good start...

sure, why not, the footswitch connects between the guitar and the amp, with your guitar into the footswitch, go rock that thing!

Make sure the guitar CANNOT "HEAR" the amp you are using. Local regeneration (feedback below the level to sustain full feedback) will give a boom sound like in a cave. If you get near enough to the amp for feedback to build up, you can actually see the string vibrating and building up. The loudness has much to do with the amp you connect this too and the settings

That is the way it is supposed to work... It is a level control to control the level sent to an EXTERNAL effects unit. What external effects unit are you using? Brand and model please. If you proportion more to the effects loop, you want to make sure the EXTERNAL effects unit is on and its gain controls are up. The foot switch input should control the EXTERNAL effects unit when you plug the footswitch into the EXTERNAL unit. The footswitch input on the amp itself has NOTHING to do with the external effect loop, it only affects the amp's own DFX unit.

Test if it does it with the guitar cable unplugged from the amp. If it does, then it is time for servicing... If not, then you have a system grounding problem and the guitar cable is "leaking" signal into the amp. This can happen even if guitar is NOT connected.

Main thing to verify is that the particular footswitch and cable you have is specifically for that amp. If it is not the right one, that is your problem as there is very little compatibility among footswitches.
Looking at the schematic, plugging in JUST the cable shifts operation as you observed. This uses a crazy circuit in which AC is applied on the cable and the footswitch has a diode each direction that causes the amp to shift between the states. when you plug a bare cable in, it disconnects the internal diodes and switches for control at the amp, hence the signals float.
You should investigate the footswitch to make sure it is the right type with the diodes resistors and caps that is for the Fender Deluxe.

You can find the schematic for the amp here:

http://www.fender.com/support/amp_schematics/pdfs/Hot_Rod_Deluxe_Schematic.pdf

Look at the circuitry of the switches on the schematic at C8. Your pedal should have similar circuitry. Assuming your cable is good, the problem would be in the pedal itself.

Well,its a real obscure amp.No company website from what I can find.
Here is a review of the amp though on a good tab forum:
http://www.ultimate-guitar.com/reviews/guitar_amplifiers/danville/tec80g/index.html

As for the footswitch dist.pedal,you have a few options.Look on the back of the amp and see if there is A)an effects loop.This may say "return" and "send" and you can hookup a pedal through that to bypass the input jack.Then just plug in normally to the front of the amp.Also check to see if there is a 1/4 input on the back that may say "footswitch".If so,fender makes a button footswitch that comes with most of their middle of the road combo's.This plugs in just like a guitar cable and will switch your channels.

If you need a recomendation on a distortion pedal go with MXR.Its a little morre expensive(by $10.00 maybe),but its the best bang your gonna get out of a pedal.

If the footswitch is not switching correctly, open it up and check for any shorts or a defective switch. Sounds like it's a problem with the switch.

Hi there. If there is still feedback with nothing plugged into the amp, the problem is internal to the amp. Probably worn input jack or intermittent connector internal. Try thumping on amp with nothing hooked up. (guitar)
Thanks
Paul