This was resolved by turning off "Lower Graphics Quality" under Options. I believe I accidentally turned the lower graphics on one day o_O! The issue had been previously talked about. Peaceful Mode is now working.
The turning off "Lower graphics quality" worked for me on Ipod touch!!! It was confusing because I hadn't purposely selected the lower setting.
This was resolved by turning off "Lower Graphics Quality" under Options. I believe I accidentally turned the lower graphics on one day o_O! The issue had been previously talked about. Peaceful Mode is now working.