We present an experimental study of the effects of oxidation on the magnetic and crystal structures of exchange biased epsilon-Co/CoO core-shell nanoparticles. Transmission electron microscopy measurements reveal that oxidation creates a Co-CoO interface which is highly directional and epitaxial in quality. Neutron diffraction measurements find that below a Néel temperature TN of approximately 235 K the magnetization of the CoO shell is modulated by two wave vectors, q1=(1/2 1/2 1/2)2pi/a and q2=(100)2pi/a. Oxidation affects the q1 component of the magnetization very little, but hugely enhances the q2 component, resulting in the magnetic decompensation of the core-shell interface. We propose that the large exchange bias effect results from the highly ordered interface between the Co core and CoO shell, and from enhanced core-shell coupling by the uncompensated interface moment.