I would try (in order of preference):
1) new strings, shoot at least 100 shots to let them settle (short range) and then finalize the peep location / string placement
2) remove the peep and go peep-less. I've shot without a peep for 25 years now, shooting first a Timberline No-peep and for the last 10 years shooting an IQ sight with the same NP tech built in.
I say try new strings first because if you're used to shooting a peep, the peep-less style does take some effort to get used to it and this could cause some frustration to someone that has never tried them. But the pluses in my mind - I'll never go back to a peep.
Here's a link to a thread about peep-less systems:
http://www.outdoorsmenforum.ca/showt...hlight=no-peep - my input at post #7
J.