Curling leaves is often a sign of under watering.
One of the problems with peat is that once dry it is extremely difficult to re-wet. My guess is that you underwatered and the peat dried out. Unless you weigh down and soak the whole thing in a bucket of water for 24 hours, it is quite possible that only the outer layer of peat is now damp and the centre stayed dry.

thanks, here is a photo of the plant. The peat was very dry and the water lately has sat on top of the peat instead of soaking into it. maybe that is what happened here...

The root-ball area in the center of the pot is now moist, but everything around it is bone dry is that a problem? should I still soak it?

Thanks!

Yes, the peat is probably repelling water, and you should probably transplant it as soon as you can settle on a new well-draining soil, the sooner the better. There's a lot of information on this forum about different citrus soil choices. The peat needs to be soaked, but not sure the plant should be kept in water for 24 hours, you're in a difficult situation. I wouldn't soak the pot with the plant in it for more than 30 minutes, but others here my have more experience with this dilemma.

You still need to soak this. A day in water (never colder than room temperature) will do no harm and is the only way to penetrate dry peat.
In addition to the wrong soil, such a small plant should never have been potted into such a huge container. Again, it leads to watering problems because if you give enough water to supply the plant at the centre then the rest of the soil stays too damp. A well-growing citrus plant can be re-potted every couple of years into a pot just a bit bigger than the previous one.

I agree with Citrange on this. Way too large a pot, and not a good potting medium. I would search for "511 mix" on our forum for a great container potting medium. Or, if you can find it in your area, Farfad Professional Heavy potting mix (again, search our Forum for "Farfad" to get the best recommendations for this pre-packaged mix). I would do this right away, your little tree is failing rapidly. The good news, is citrus are very resilient, so if you can get this tree potted up in a much smaller pot, about 1/2 the size you currently have it potted in, and in about 2 or 3 weeks, after it has settled down a bit, start fertilizing with DynaGro Foliage Pro, you should start to see a come back. Lots of sunlight, too.

Patty S.