There's a technical term for this - the switch is f#cked.
Seriously it sounds like it could be one of 2 things, if the sound drops with the switch through the hole but not bolted, then check the soldering. If it only drops when you put the nut in place, then try putting the nut on without it through the hole. I am thinking that perhaps you are blocking part of the movement of the switch so it is not making proper contact. If you screw the nut down and it is ok, try losening it to the point at which the signal drops and look to see if it is stopping it moving properly.
If it is neither of these, then it is new switch time!