Hello Marilee, First, my condolences on the loss of your father. I lost my dad 14 years ago, but I remember the loss daily. I hope you are doing OK.
I have traced the Peabody line back to the original Peabody (of this line) in the U.S., whose name was John. We are descended from his son Francis. I can send you more details in an email, if you want. I am trying to work on putting the tree online, but that is slow going for me, as I don't have a lot of spare time lately. There is an old Peabody Genealogy (by Selim Hobart Peabody, ed. by Charles Pope) reproduced through Google Books (http://books.google.com/books?id=cIlJAAAAMAAJ&pg=PP11&dq=%22peabody+genealogy%22&hl=en&ei=ysCJTujeBajr0gGo_cHSDw&sa=X&oi=book_result&ct=result&resnum=2&ved=0CDwQ6AEwAQ#v=onepage&q&f=false), but I know of some errors in it, so use with caution. If the link does not work, try searching on "Peabody Genealogy" in Google Books -- one of the results will lead to the full text online there.
Whatever information you have on your line I would love to hear about. It does sound like you are descended from gr-grampa's brother -- the names would be very strangely coincidental if not. Do you have birth or death dates and locations for your grandfather (or does your aunt) and your dad? With those I could probably make a better connection for you.
I don't have my notes with me at present, but I think I may have found another son in this line somewhere. I'll look up that information as soon as possible and let you know.
It's so great to hear from someone in this line! I should know better than to give up hope, as I have received replies years later from several posts.
My line goes back this way: Janet PEABODY b. to Edward Hale (1931-1997) & Ellen Bernadette (SHEEHAN) PEABODY son of Edward Vernon (1894-1989) & Beatrice (BAILEY) PEABODY son of Arthur Williams (1870-1966) & Etta Mae (BISHOP) PEABODY son of Edward Carlton Jr. & Dolly Jewett (HALE) PEABODY -- which is where we connect. I don't know his dates off the top of my head, only that he and Dolly both died in 1871 and the 2 boys were sent to live with different relatives (Arthur with Hales & Henry with Peabodys). Henry is the elder brother of the two.
Please let me know what you do know about this line, and in the meantime I'll try to pull together the info that I have on Henry's line and beyond.