I had the same problem as you. To clear up the blurred lens you will probably need to install a clarifier in your peep sight. Super peep is what I use, they are threaded and you can change the size peep hole for what kind of shooting you are doing. A rule of thumb, a lens power of 1-5 you can use a number 1 clarifier a 6 power a number 2 clarifier and a 7-8 power a number 3 clarifier. Also, if you by chance wear glasses, this will blur the lens on your scope as well. I have been told that if you wear contacts, the lens will not be blurred like they will with glasses. I suppose it is in a since looking thru something that has magnification thru something that has magnification, it just don't work. Super peep is made by Specialty Archery Products and you can probably get them from Chris here on 3D shoots store. I am sure he can help you out with that. They carry a lot of stuff like that. Hope this helps you, anything else just give us a shout, I am sure someone on here can help you out.
Goodluck and good shooting