I had a similar problem on a bow. I'd always used 2" diameter pin guards, and bought a new sight with a smaller sized guard. My old peep left alot of air "around" the sight at full draw. I just got the next size smaller peep. Worked fine. Not sure how much extra material there is on your peep, but if it's too small, you might be able to bore it out slightly. Doesn't take much at all to make a big difference.
2006 Rytera Bullet X 60#---2008 Moab 70#
2008/12 Firecat 60#--- 2010 Warthog 70#
2010/2012 Alien X 65# 2011 Onzas 60 & 70#
2009 Warthog 70#---2009 Firehawk 70#
2010 Strother SR-71 65# & 2012 Strother Rush 65#
I hunt, therefore I eat. lol