[xindy] Problems with utf8 files

I am working on a book project typeset with LuaTeX (to be more
precise, lualatex). I need to change the sort order of the various
accented letters, and make them behave as if they were unaccented
(i.e., as in the Duden-order in German). My project  is in
English/american and the tex input files are all unicode, inclusing
the \index entries (no Latex workarounds like \"o etcetera). I  wrote
a small xindy style file with my sort rules, such as:

(sort-rule "ö" "o")
(sort-rule "ü" "u")

etc.,

plus the standard modules (the whole file is appended below).

But here is my problem:

1. If I call xindy with the english language module:

xindy -L english -M mymodule.xdy myfile.idx

then the sort rules are ignored. They are obeyed only if I change  the
\index commands to contain Latex-like accents instead of unicode
accented letters. However, this is not practical, since I have
hundreds of entries contained across several files. It seems as if
xindy is not recognizing the input file as utf8.

2. If, on the contrary, I call xindy without a language module, as in

xindy mymodule.xdy myfile.idx

then, the sorting of accented letters is correct, BUT I get all the
entries starting with an uppercase letter before the entries starting
with a lowercase letter. In other words, my index looks like:

A
...
B
...
C
...
...
...
a
...
b
...
c
...
etc.

I have read all the relevant sections in the Latex companion and
googled extensively, but I cannot find any hint on how to solve the
problem.
Any help is greatly appreciated

Cheers,

Stefano

-----------------xindy style file-----------------------
;;; xindy style file for the VIBS book series

;; use tex automatic modules
;; use all of texindy's auto modules EXCEPT
;; the lettergroups
(require "tex.xdy")
(require "latex-loc-fmts.xdy")
(require "latex.xdy")
(require "makeindex.xdy")

;; more texindy's auto modules
(require "word-order.xdy")
(require "numeric-sort.xdy")
(require "page-ranges.xdy")


;; sorting rules
; umlauts
(sort-rule "ö" "o")
(sort-rule "ü" "u")
(sort-rule "ä" "a")
(sort-rule "ï" "i")
(sort-rule "ë" "e")

; graves and aigus accents
(sort-rule "ò" "o")	
(sort-rule "ó" "o")
(sort-rule "é" "e")
(sort-rule "è" "e")
(sort-rule "ì" "i")
(sort-rule "í" "i")
(sort-rule "à" "a")
(sort-rule "á" "a")
(sort-rule "ù" "u")
(sort-rule "ú" "u")

; accents - circumflex
(sort-rule "ô" "o")
(sort-rule "ê" "e")
(sort-rule "î" "i")
(sort-rule "â" "a")
(sort-rule "û" "u")

;; End