If your Peavey has an effects loop, try connecting the Pod into the return of the loop instead of in front of the amp (nothing will be connected to the send of the loop). It works better for me that way with my Marshall. It bypasses the Marshall's pre-amp so the full sound of the Pod comes through.

Don't know if Peavey amps do that (bypasses the pre-amp by connecting to the return), but it's worth a try.