Nut job?

[Mikey]

I have a 1970s MIJ Epiphone 12-string acoustic (model FR212) which I got on Ebay. There were no major flaws but it needed doing up so I cleaned the frets and treated the fingerboard with lemom oil; replaced the tuners and the bridge pins, fitted a bone saddle and, of course, a new set of strings. It plays ok but sounds a bit dead and doesn't really project. I was thinking about getting rid when I happened to put a capo on the first fret. There was a marked improvement in the sound which had much more volume and discernable tone. I only really want it as a "strummer" but with this new found sound I played The Rutles "I Must Be In Love" ( a great 12-string "jangly" number) as a test piece and it sounded great. Took the capo off and it was back to the dull, dead sound.
Question is, what fault in the set up does this suggest. Could it be the nut, perhaps? Maybe it needs a good clean or replacing even? I left it alone because it looked ok but maybe not. Couild be the action needs lowering but I don't think so.
Any ideas guys and gals?

[Bluesnote]

Change the nut to bone as well. I did it with a classical guitar and it really made some difference.
It does'nt cost much for a bit of bone, so if it does'nt work its no big deal.
Hugh.