Due to structural differences and parameter mismatches, power oscillation may arise when the diesel generator (DG) and virtual synchronous generator (VSG) operate in parallel, especially when the periodic pulsed load (PPL) is integrated. This paper analyses the power oscillation mechanism in the paralleled system of DG and VSG and provides an in-depth discussion of the novel phenomenon of power oscillation induced by PPL. The results show that power oscillation is amplified as the PPL pulse frequency approaches the inherent oscillation frequency of the paralleled system. Furthermore, the inherent control delay of the DG speed governor exacerbates the power oscillation. To address this issue, a dynamic phase compensator (DPC) is proposed and integrated into the VSG control loop. By detecting the difference between the instantaneous output power of VSG and its steady-state theoretical value, the proposed DPC provides additional phase compensation to the VSG output phase, effectively suppressing power oscillation for the paralleled system of DG and VSG integrated with PPL. Finally, experimental results validate the theoretical analysis and demonstrate the effectiveness of the proposed DPC.