TUESDAY, 8:01am: This rumor died a quick death. Tom Haudricourt of the Milwaukee Journal-Sentinel talked to Brewers GM Doug Melvin, who said there's nothing to the rumor and he hasn't talked to the Padres.
MONDAY, 9:34pm: According to Bill Center of the San Diego Union-Tribune, the Brewers "are now said to be interested in Jake Peavy." Peavy's agent Barry Axelrod said, "I haven't been asked about the Brewers, although we've heard there was some interest before that didn't come to fruition."
It's possible that this rumor stems only from the speculation of Brewers third baseman Bill Hall. ESPN's Peter Gammons wrote on Sunday: "Hall believes the Brewers will be in on Peavy, when and if he goes on the market." I haven't seen any recent articles actually reporting talks between the two teams. Still, the speculation is logical.