Hi Andrew,
Unfortunately peach trees are prone to insect pests and diseases more then just about any other fruit.* You don't say where you live, but these trees are also prone to winter injury from freeze and thaw.* It's a problem where I live in the Mid-Atlantic states.*
You may have some type of borer as well as either a disease or pest that has attacked the fruit once the tree was weakened.* Poor pollination due to lack of bees could also be the problem with your fruit.* Borers could be: lesser peeachtree borer, peachtree borer, peach twig borer or shothole borer.* You can read about them here.
http://www.ct.gov/caes/cwp/view.asp?a=2823&q=377864
Here's more info about some of these pests.
Lesser peachtree borer
http://www.ext.vt.edu/departments/en.../peachbor.html
Peachtree borer
http://www.ext.vt.edu/departments/en...peachtree.html
Brown rot of fruit is another possibility.
http://www.ext.vt.edu/pubs/plantdise...1/450-721.html
Here are some other diseases of peaches.
http://www.nysaes.cornell.edu/pp/ext...ne.shtml#peach
Any of that look like what you see?
Newt


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