Well, I've installed a custom ROM (Cataclysm) and have tried a couple of different kernels, and there is no change.
I also tried Jishnu Sur's camera mod; no change. Other 3rd party camera apps; no change.
Not surprised that changing ROMS/kernels/apps wouldn't make a difference. All ROMs and kernels generally use the same closed/open source drivers, and base AOSP. ROM devs build upon it most of the time with all the bugs and issues that come with them. I bet the noise cancellation software is deeply nested in some device driver for the Nexus 5, which while "open sourced", is most likely NOT being tampered with by ROM devs. (Why try and modify device drivers when it's the official ones and at FIRST GLANCE seem to work lol. It's included and necessary for official or custom OS's)
As for apps, they can choose if they want to make use of noise cancellation, and they typically always make use of it. Some rare ones give you the option to enable/disable, where it's been proven in this thread that disabling noise cancellation has given us clear crisp audio recordings. Some other apps have built-in noise cancellation which layers itself over the default OS/driver implementation, which is like adding mayonnaise on top of ranch sauce, making it no better. That's my educated guess on why changing ROMs/kernels/most apps wouldn't and hasn't worked. It is centered around a driver or piece of software specific to the Nexus 5 that is carried into every ROM and kernel, thus the apps will too. (assuming hardware is NOT the case of course)
These are the device driver binaries for our phone:
https://developers.google.com/android/nexus/drivers#hammerhead
I'm betting updated device drivers for the two mics is necessary from Google/LG. It's not a KitKat problem as far as I can tell, it's a Nexus 5 issue, which hints at drivers, hardware, or both. Otherwise other devices starting to update to KitKat would have the same problem as described in this post. (my friend updated her Nexus 4 and Nexus 7 to 4.4 and she didn't have microphone hiss/static in silent or noisy environments, but every single Nexus 5 owner and Nexus 5 I have had possession of DOES exhibit this issue)
Speaking of which, I've reviewed a FEW Nexus 5 video tests from some high profile smartphone reviewers, and indeed, it can be heard in many if not all the quiet/silent video tests. However, MOST reviewers don't seem to shut the **** up in their video tests for even a second WHILE outside in a noisy environment, which drowns out the hiss/static in most cases I've tested personally. Here are some videos from reviewers I've found who recorded in gentle/quiet environments and didn't feel the need to talk non-stop. You can definitely hear the hissing and static, yet every single commenter, and the reviewer/uploader, remain completely oblivious to it. People pay more attention to the voice and environment sounds smfh.
Phandroid N5 Video Test
MKBHD N5 Video Test (Sounds Clear but listen carefully whenever he stops speaking, noise cancellation artifacts)
Chris Nacca N5 Video Test vs Galaxy S4 (He switches between the two phones and you can hear the static on the N5)
Feels like we're the only ones with EARS that work properly. I can bet that 85 - 90% if not all Nexus 5's exhibit this type of problem to some extent. This is not isolated by any means, we're also not crazy...