heartsy, I tend to agree with Al above for the most part. However, if they are indeed a deep green color and appear to be still putting out top growth that is not yellowing, I would first start looking for black flies as these are common in your part of the country. Black flies are minute flies that will hide on the under sides of the leaves. Because of the small size of these insects, you will need to get very close and be looking for them as they will appear to be tiny black specs and fly off as soon as the leaf is disturbed. Insecticidal soap sprayed particularly underneath will control these. The other thing I would suspect in your part of the country would be "pepper blight" which will cause leaves to crinkle and curl under or two or three other blights that affect peppers, tomatos and potatos. You might try removing all affected leaves and disposing of them into the trash (DO NOT COMPOST THEM). Sometimes the plant will outgrow the blight if you are are diligemt about removing infected parts early. As to a nutrient issue, a simple but complete soil test as provided by your local extension service will provide an excellent answer to this question. Feel free to contact me for more information if you like or if you would like assistance finding your local extension service.

do not believe that it is a goner yet, as long as it is not a shriveled brown stick it has a chance of survival, @ one point 2 of my habaneros were nothing more than 6" green sticks, all the leaves had fallen off and the tops were starting to wilt( problem w/ impropper drainage and too much rain, I replanted them in free draining soil in buckets w/ many drainage holes in the bottom and now they are out performing any of my other habs, as they say it aint over til the fat lady sings, and Im telling you that w/ the right soil and some tlc, there may be no arias (operatic solos) in your future. dig up the plant you think is a goner, put it in a nice free draining soil in a 3-5 pot or bucket, water lightly, and in a week and a half or so hit it w/ some low grade fertilizer, thanks to smoke and others like greenman, I have found that using a mix of bark, simple potting soil, and either pumice, turface, large chunk vermiculite or perlite, drains very freely, and keep them happy, also fish emulsion and seaweed extract, work great in combination to provide a nice balance of nutrients, and if u make it to the flowering stage, when ur peppers set, a nice calcium and magnesium supplement, will help u get nice big pods, that ripen at a good rate, now u may take this advice however u choose, but being that I am in western nc and you are in east tennesee we have nearly identical climates and growing conditions, so what works for me should work for you, best of luck to you coy, paul

Plant leaves curl in response to turgidity, water pressure in the leaves resulting from either too little, or too much, water available to the plant. Yellowing of leaves, Chlorosis, occurs for a number of reason, all related to nutrient deficiencies. Those deficiencies could be because of too much soil moisture, or too little, or other reasons. Here is a link that might be useful: About Plant Chlorosis

General feedback not at all specifically related to pepper plants... I would pull the mulch back from the stems a bit. Covering the ground with newspaper could be causing the water to shed to the edges, before it's able to soak into the ground, depending on the level of its' decomposition at this point. If it's close to stems, pulling that back a bit too could help water penetrate the root zone. Any time mulch is added to a spot where there was none before, there can be a "nitrogen robbing" effect the first year, until the decomposition process gets going. Fertilizer with a higher 1st number can help combat that. This would be something I'd ask the "pepper people" about. The compost could have been a little "hot" to be in the root zone (vs. just on the surface.) Much less risk of burning roots when this is applied to surface vs. dug in or tilled under. Wasn't sure from your phrasing which you did, may or may not be applicable to your pictured plants. Next year you'll be glad if this year, you finish the smothering you've started by pulling those little grass & any other unwanted sprouts that have managed to get going, while they're still small, before they make & drop new seeds, to break the cycle. On this page that lists all of the forums: http://forums.gardenweb.com/forums One can find hot peppers: http://forums.gardenweb.com/forums/pepper And general forum for all veggies: http://forums2.gardenweb.com/forums/cornucop There's probably a forum for your local area too, not sure which one would be the best match from just "northeast." Let me know if you need help deciding!