B-school adcoms tend to like Peace Corps folks, so it'll be an asset in your case. Also, quite a number of the Peace Corps folks don't have actual business experience before b-school. In fact, quite a number of incoming MBA students don't have formal business experience -- engineers, researchers, military officers, Peace Corps, other nonprofit, etc. so having biz experience isn't a necessity at all.
Where it can be more of an issue is in the recruiting process for post-MBA jobs, where it'll be a harder sell for some companies/recruiters who will prefer someone who does have some corporate experience.
In any case, what I suggest is to apply with your Peace Corps experience - if you don't get in, then apply years later with some other biz experience under your belt.
I just finished looking at your website and it has some interesting material. What caliber of school do you think I should be applying to? I do not come from top undergrad but I do have significant experience studying and working internationally as well as a score of extracurricular activities. My gut instinct tells me that I could push myself into one of the Sweet 16 schools, but that it would be bit of a stretch to apply to the Elite Eight (+ Big 2 Intl) and especially the Top 3 unless I went out and did something truly extraordinary for a couple years after the Peace Corps. I think more realistic options would be Thunderbird, the University of South Carolina, GWSB, etc.
So how far of a stretch is it to apply to Elite 8 schools with my experience, what would I have to do to make myself a better candidate for them, and what do you think of the Thunderbird and University of South Carolina business programs as schools where I would get a good education regardless of its 'brand'. I should note that I am especially interested in International MBAs and working in developing economies, especially in sustainable business ventures that contribute to third world countries' development. And I'm not hung up on going to a top school, but I do want to get the best education that I can that is within my reach.
Thank you again for your help, I recognize that you generally charge for your services so I am deeply grateful.
To those who have struggled with them, the mountains reveal beauties that they will not disclose to those who make no effort. That is the reward the mountains give to effort. And it is because they have so much to give and give it so lavishly to those who will wrestle with them that men love the mountains and go back to them again and again. The mountains reserve their choice gifts for those who stand upon their summits. (Sir Francis Younghusband)