I came across this post from last year regarding holes in peony buds, for this is the first year it has happened to me.

I think I found the answer! These gray caterpillars were on my peony plant at midnight ( they are not vivible in the daytime).

Diatomaceous earth does NOT kill them; I had to pick them off and manually destroy them ( dropped them in sanitizer /soap solution).

Can you identufy these?