Is there a reason why you need to press the joystick down to jump? I am having some problems jumping between some platforms.
I have tried multiple joysticks (Atari CX-40+, original Atari CX-40, Epyx 500XJ) with the same results. I have a Commodore 64 Ultimate.
I assume the problem is on my end. I do not have problems with any other games with joystick directions.
When I have time, I will see how to reset the C64U back to the default configuration since I doubt other C64U owners are having this problem with your game.
In case anyone else has this problem, I just needed to remove the USB dongle for my mouse. Since version 1.1 of the C64U firmware has mouse support, I normally leave the mouse dongle installed. However, that conflicts with Petal Panic.
Once I removed the dongle, the game played perfectly. I still stink at it, but I can move around the screen correctly now.
I had the same problem under VICE. Peter jumped when I pulled the joystick down. More specifically, when I released the joystick. Joy up did nothing.
I had the Mouse (1351) installed on port #1. After switching it to joystick as well, the issue went away. So the mouse causes issues in the emulator as well.