Are you running the Nano at 5V? If so I don't think 2.85V logic levels will be high enough.
When run at 2.4V to 5.5V the ATmega needs Vcc*0.6 or higher to read a logic HIGH. At Vcc=5V that would be 3V. The absolute maximum Vcc you can use and expect 2.85V to read as HIGH is 4.75V. Try running the Nano at a lower voltage like 4.5V (three alkaline AA cells in series connected to Gnd (-) and +5V (+)) Then the logic threshold would be 2.7V.
Note: You can go to an even lower voltage to get more signal margin but aren't supposed to run a 16 MHz ATmega at less than 3.78V.