You were right. It also doesn't work on things that are too young. Live clams have been dating as having been dead for years. So basically, the whole dating system is crap.
That's what I've read. But saying they aren't sure doesn't make headlines I suppose.
I did a long piece on radiocarbon dating yesterday, including a discussion of dating live clams. Reference is:
http://www.freerepublic.com/focus/f-news/1493403/posts?page=211#211
Carbon-14 dating actually works pretty well, but not on living organisms because of the World War II era atomic tests. Also, clams and other marine organisms can absorb reservoir carbon from deep waters, and that needs to be taken into account.
That's probably because the outside of clams IS DEAD for the life of the clam.