I've been running two VV4 games simultaneously, and completed all 16 puzzles in the 'one' game.
For whatever reason, I can't complete puzzle #15 in my second game.

Here's what occurs:
Once the peep have achieved their mediative state. Rainbow appears and so does the 3 sparkling lights above their head, but no cleansing of the tree.
The peep simply goes on to complete his or her regular task with the sparkling lights still active above the head. I've tried numerous of times and same thing every time.

Yes, I did the soapy bath and kept the area free from kids & adults alike.
Any suggestions are welcome.

Did you actually drop the peep on the tree?

I see, I didn't specify everything properly. Yes, I did drop them off at the tree but so far four villagers have refused to enter. Can't say I blame them, I wouldn't enter either.
Seriously though, I will give it another try.

Yes, all of what you're mentioning I have done. Don't forget, I have successfully completed one game already. That's why I am so puzzled by it, and of course the word 'BUG' was the first thing that came to mind. That didn't seam logical either!

Thank you for all your suggestions, I will give it another try.

Today, I succeeded in finishing puzzle #15, on my first try at that. Now it's about finishing those pesky little collectables.