Answer: Gardenias like an acidic soil and peat moss is certainly acidic, but I don't think it's the proper growing medium for your gardenia. Peat moss is fine when mixed with potting soil or with garden soil to help lower the pH (acidify it), but peat holds too much water and once it dries out, it's difficult to rewet. Regular potting soil has peat moss in it, but it also has larger particles (usually cedar bark and chips) and it has either vermiculite or perlite, which help lighten the mix and keep it aerated.
I would repot the gardenia once again in a good grade of commercial potting soil (Miracle Gro, or Sunshine Mix) and water it well to help settle the soil. After two or three weeks, try pruning your gardenia back to encourage healthy new growth. When new growth appears, begin fertilizing your plant. Since it's in a container you'll want to be careful not to over-fertilize and burn the roots. You can feed it every 2-3 weeks with a half-strength dilution of liquid fertilizer (Miracle Gro or Peter's 20-20-20). Feeding in this manner will ensure the roots have a constant source of nutrients without the concern of burning the roots.
Hope your gardenia regains its health soon!
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