Answer: Both too much or too little water could cause the older leaves to yellow. The fact that blossom end rot is also occurring this late in the season is a pretty good indicator that water problems are involved.
Low nitrogen can also cause older leaves to yellow. If a disease were involved, I would expect to see quite a few leaf spots developing before the leaves yellow and drop.
Bacterial diseases are more often a problem than are fungal diseases on peppers in the south. The spots from a bacterial infection tend to be angular while fungal spots tend to be rounder with a yellow halo around them.
Your mulching practices are a great idea. Try to keep water levels more even. Not too soggy or too dry. For bacterial spots, the lowest toxicity solution for peppers is probably a copper based spray.
Good luck with your peppers!
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