[allturtles]

That's all very tidy, but what you've described is barely in the show at all.

Until reading your comment my recollection was that she left it with her sister; apparently that's wrong and you can figure out what really happened by piecing together a few different short scenes across several seasons. As someone who watched the show as it came out over 8 years, it was like the baby fell off the face of the earth with no explanation.

[twoodfin]

The baby did fall off the face of (Peggy’s) earth. She gave it up shortly after it was born. That’s it.

As I said, it comes up again and again. Most directly in “Meditations in an Emergency”, wherein she tells Pete the whole story of his baby and why she gave it up.