I wish I had taken pictures of what I did because then I could have a tutorial, which would have been a first, but it turns out that Gertie has promised a peter pan collar tutorial later this week and she actually knows what she's doing. But in case anybody's interested in my rinky dink method of making and attaching a peter pan collar, here's what I did:
I lowered the neckline (I eyeballed it). Then I lay the shirt flat and traced the new neckline onto a piece of paper. I drew a peter pan collar around this neckline tracing, and added seam allowances on the outside. Voila! A peter pan collar pattern piece. I cut out two collar pieces: for the upper collar I used the discarded sleeve fabric, and for the undercollar I used white broadcloth that was left over from some old forgotten project. I sewed these two collar pieces together (right sides together) along the outside, clipped the curves, turned and pressed.
To attach the collar to the shirt I sewed the edge of the pink (upper) part of collar to the inside of the shirt (right side of the collar facing the wrong side of the shirt); then flipped it to the outside. I then turned under the edge of the white undercollar 1/4" and topstitched it in place. None of the stitching is visible from the outside.
Here you can see the topstitching on the undercollar:
And this is the inside of the shirt:
This is not the slickest way to attach a collar but it works for me.