In large bowl combine sugar, flour, nutmeg, and cinnamon. Add peaches and toss till well coated. Let mixture stand for 5 minutes. Carefully stir in grenadine and lemon juice. Turn mixture into a 1 1/2 quart casserole or a 10 inch round deep baking dish, spreading peaches evenly. Dot with butter or margarine.

Prepare and roll out pastry to an even 9 inch or 11 inch circle (depending on dish size). Cut slits in pastry. Place over peach mixture in baking dish. Trim pastry. Flute to sides of dish but not over edge. To prevent overbrowning, cover edge with foil. Place dish on baking sheet in oven. Bake in 375 degree oven for 25 minutes. Remove foil. Bake for 30 to 35 minutes more or till crust is golden. Cool on rack before serving.

If you want a bottom crust also, simple line bottom of dish with pastry, and trim to edge of dish.