Many AM superhet radios do not have an RF amplifier transistor and they have plenty of sensitivity and volume. Maybe this radio is a (gasp!) super-regen that doesn't even have a detector diode.The OP solution was adding a cap to the emitter, that increases the RF gain, more RF more audio more sound. This goes against your theory that the RF blocked the LM386.
did you not notice that when he added the 1nF capacitor to ground at the input of the LM386 power amplifier then " Using that capacitor gave a large boost in output" which has nothing to do with not having enough RF gain.