Gareth,
this sounds like you dont have the right CYGWIN environment variable set. Unless CYGWIN environment variable includes tty - ctrl-c and ctrl-x will not function in nano, and a few other programs.
What environment variable would be refering to? I ran env and didn't see anything having to do with tty or nano. But, maybe it is there since Ctrl+X works to exit.
He means the CYGWIN environment variable. See:
<http://cygwin.com/cygwin-ug-net/using-cygwinenv.html>
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