Dog is in her first heat and wakes up squealing that she is in pain at her vagina, what is wrong?

Some women have severe menstrual cramping when in their periods & dogs can have the same severe cramping when in heat.

You need to get online & do some research about dogs & learn as much as you can. Most people don't know very much about dogs & they can have 3 or 4 dogs in a life time & know nothing about them.

As a Canine Behaviorist I am amazed at how much people do not know about their dogs.

If she is in PAIN - it is NOT NORMAL (!!!!!!!!!!!) and she needs to see a vet.  So STOP felling helpless and get her in, TODAY!  If she has a CLOSED PYOMETRA nothing would look or smell ODD.  You also do not KNOW if she swallowed an indigestible object (and now has partial or complete intestinal BLOCKAGE or some other coincidental issue, not directly related to being "in heat".)  Please stop "playing vet" and get her EXAMINED!

I think you're right in allowing her one heat at least before spaying but squealing isn't right although some dogs do feel very uncomfortable with it. 

Be careful what other dogs are going to her as squealing can sometimes turn on 'prey drive'  and obviously if it is males anyway then they need to be kept away. 

Unlike some humans, with their periods, heat in the dog shouldn't be 'painful' although the instinctive need to mate could cause some anxiety.

What you see isn't the vagina (externally it's the vulva), unless it's prolapsed, which would cause pain.

IF she's squealing in pain, she needs A VET, not unqualified people on here who can only ever offer guesses.

Could be pyometra. Why the Hell haven't you altered your mutt?

Get her to a vet, her behaviour is not normal...

some pain killing medication from the vet may help with her pain

Get her fixed and this will not happen.

Its being a female, overeacting to a normal bodily function.

Does she SAY she is in "vaginal" pain? If not, how do you know? If she "howls", it could be another symptom  of something far worse. Take her to a vet.