Hi Obs Cop,
Have similar condition to you. In fact I got my class 1 medical about a year ago, and not unexpectedly the peak flow test was the one where I struggled a little. Anyway, after being offered some on the spot coaching and allowed a couple more shots at it (didn't seem to make much difference to result..) I was passed on the basis of being borderline there but otherwise apparently OK.
So, answer is that there is some discretion and no doubt the rest of your health record will be relevant. (I'm sure it all deteriorates with age...including the required pass mark)
Believe the peak flow is so that your lungs would have the capacity to deal with sudden depressurisation at altitude, though do not know the details. Though it seems that if this happens in a small business jet at high altitude good peak flow still might not save you, do not know the phsiological / physical considerations in the case of an airliner.
All the best.
P.S. Following your IMC diary, nice one!