Let the piecrust stand at room temperature according to package directions; unfold. Line a large baking sheet with foil and lightly flour. Place pastry on the prepared baking sheet and roll to a 14 x 11-inch oval.
In a large mixing bowl stir together granulated sugar, flour, and nutmeg. Stir in peaches and lemon juice. Spoon peach mixture onto pastry, leaving a 2-inch border. Fold pastry border up and over peaches, folding edges gently as needed. Combine egg and water. Brush egg mixture onto the top and sides of the crust.
Bake in a 375 degree F oven for 40 to 45 minutes or until the crust is golden. If necessary, cover top crust with foil for the last 10 to 15 minutes of baking to prevent overbrowning. Cool for 30 minutes on the baking sheet. Sprinkle edges with powdered sugar, if desired. Serve warm with sweetened whipped cream, if desired. Makes 8 servings.