Thanks mtashiro! It's working now! Here's what I did.
1) Install the IMIC USB sound card adapter to callmanager.
2) Once the IMIC is detected and installed goto, Control Panel > Sounds and Multimedia > Click on Audio Tab.
3) In Preferred Device under Sound Recording, the IMIC must be selected. Click the volume under it and check the Line In select checkbox.
4) Connect the external audio device to the Line IN jack on the IMIC USB soundcard.
5) Now, goto Callmanager Administration Page > Service > Media Resource > Music On Hold Audio Source.
6) Select the Fixed Audio Source from the MOH Audio Sources in the Left Pane of the webpage.
7) Give this Fixed Audio Source a name in "MOH Fixed Audio Source Name" field.
-Open the Windows Control Panel and double-click Sounds and Multimedia. Click the Audio tab, and note the exact name (case-sensitive) in the Sound Recording Preferred Device setting. Enter this name for the "MOH Fixed Audio Source Device".
9) Click Update.
Checked in the MOH server configuration page that the MOH Server's Fixed Audio Source has the appropriate name (the one you add in step 7). Click > Update > Reset the MOH Server.
Also verify if you have added this new fixed audio source to the appropriate MRGL.