If you want the pokeflute, talk everyone inside the Power Plant, then return to the gym where misty lies. You then will encounter someone of Team Rocket, he wants to escape. Just follow him by heading to north of the town where the bridge is, beat him, then return to the gym. You will find the machine thing on the upper left side where the life belt is.
If you got it, go to the Power Plant, then talk to the fat guy and you will get a nice TM. After doing that, go to the Radio Tower (it is in Lavender Town) talk to the president and finally you got the Pokeflute Channel on your radio. Its inside the Pokegear, you can find the radio, the channel is hidden but its easy to find
~Found in GBATemp