OK, this is going to out me as stupid, but did you go back to where you first meet him? Because when I first did this quest, I didn't realize you had to click on him after you speak to the ghost of Big Marge and walked all the way to the Magicockerel, only then realizing that he hadn't been following me and having to walk all the way back to find him!
It's not a stupid question, but yes. I've already went back to the chicken coop, and no sign of Peeper. Good idea, though. I'm pretty sure the game is just glitched at this point, and the only option is either console commands or sending it to Larian to fix.