I'm thinking that the baking powder is indeed reacting with the acid in the peaches and applesauce (lots of malic acid in apples). First off, are you using a double acting or single acting baking powder? If you are using a single-acting, there wont' be a second rise from the heat in the oven (that is the second-action). If you are avoiding aluminum in your baking powder, there is only a few companies that make actual double acting baking powders that do not contain aluminum (bob's red mill, argo), others that claim double acting, without aluminum, are likely lying (check ingrediants).
If it were me, looking at that recipe, I would stiffin the batter a bit (a few more tablespoons of flour). Or use a flour with a slightly higher protein content (some AP flours have very low protein [gluten] content, compared to others). That or the recipe uses a different compaction rate when it counts "cups" (this is why I use recipies that use weight measurments, not volume. another rant for another day).
If you'd like help further troubleshooting, toss me a message.
Belial wrote:I am not even in the same country code as "the mood for this shit."