A new method is demonstrated for extracting radiation from a virtual cathode oscillator in transverse electric (TE) waveguide modes. The dominant radiation mechanism occurs in the region of the virtual cathode, and is not due to reflexing of electrons. Microwave radiation occurs simultaneously or just after beam pinching in the diode. Electrostatic signals show simultaneous occurrence of the virtual cathode and microwave radiation. At the same time, the electron population divides into a beam population and a reflexing electron population. Inhibition of pinching by an axial guide field suppresses microwave radiation.