Using peat works well, but just note that it will color your water and make it look sort of like a light tea. Remember fish can get used to a high pH level. I've heard of people successfully keeping Discus at a pH of 8.0 where they normally prefer as close to 6.0 as possible. And a constant pH is always better then one that changes. The use of peat would have to be slowly introduced in order not to outright shock your oto due to too fast of a dip in the pH.
I can't find the exact page right now, but I've got a book that discusses messing with pH. In some cases, such as Africans Cichlids when you've got 5.5 tap water, it's necessary. It might actually be necessary with your otos.
The thing you've got to remember is that every single water change will need to be filtered through a peat pillow (or treated in some way with peat) in order to keep the pH stable.
What you could do to slowly adjust your fish would be to begin by only treating water during water changes, and doing a large number of small changes over a couple of weeks. Maybe 10% every other day (or better, 5% every day, if you can commit to that) until the water gets pretty close to the pH of the treated water.
Mmmmm. Am really wary of starting with pH messing. Your warning about the increased labour of water changes is noted. It may demotivate me from doing them as often as they need doing. I"ll definitely keep mulling this one over. I've bought the peat now.
It is a tough decision. I've got really basic water, too. I've found that plants have helped a bit. Decomposing plant matter makes the water a bit more acidic (and it's a slower process). It doesn't do a lot, though.