definitely keep it! although i would give it more time to mature a little. is it in morning sun or afternoon sun? I ask because this may be a hint (or not) as to why the colors look faded and washed out...? peonies are famous for getting off to slow starts, but I love them anyway! also, I hear that alfalfa meal works wonders on peonies! this year is the first time ive used it on our "Felix Crousse", which is only a three year old plant and its got 6 huge buds on it! none of them have opened yet so we're anxiously waiting for the results, to say the least! maybe its dumb luck or maybe there's something to the alfalfa meal thing. either way im very pleased with it for being such a young plant. we also fertilize it with diluted organic 5-1-1 fish emulsion once its done blooming, to encourage clump growth. stick with it!