Just figured it out with the help of a hex editor and examining the level data file! The interactable part of the element that contains the cord only covers a tiny portion of said element, you might want to take a look at it and expand it to cover the entire thing.
The phone cord puzzle seems impossible, I noticed even the youtube vid posted yesterday got stuck there and was unable to progress. Is there an element missing from that level?
Can I just say I am extremely happy that I was able to sneakernet the latest version over to my Windows 98 machine and not only did the game run flawlessly but it even still supported LAN multiplayer?