But they showed they do not plan to hang around the wrong end of the table for too long with Neil Danns scoring two superb goals to see off Posh.
The visitors arrived in south London lying bottom of the league with only one win to their name since Mark Cooper took over as manager in November.
But their problems pale in comparison to Palace's, who are around £30million in debt and about to lose their best player, Victor Moses, to the highest bidder.
Moses was again barred from playing by the administrators in case an injury scuppers his proposed sale, but Palace under Neil Warnock seem to thrive on adversity.
Warnock, who has been told his job is safe, had to send out a patched-up side with right-back Danny Butterfield shifted into attack.
And Butterfield and Danns put in storming displays to typify the never-say-die attitude at Selhurst.
The hosts survived an early scare when Julian Speroni saved at full-stretch from Lee Frecklington's snap shot.
But they soon began warming to their task and Butterfield almost opened the scoring when he robbed Tom Williams in the area before shooting into the side-netting.
Another defensive lapse allowed Butterfield to cut the ball back to Darren Ambrose but the 14-goal midfielder missed his kick in front of goal.
Posh could have gone ahead in the 26th minute when Chris Whelpdale headed George Boyd's corner goalwards but Nathanial Clyne cleared from under the crossbar.
And two minutes later Palace went ahead when Clyne's chip was headed on by Butterfield and Danns, with his back to goal, acrobatically hooked the ball behind him and into the net.
Butterfield was clearly enjoying himself up front but he should have made in 2-0 after the break when Lee Hills' long throw fell to him, only to blast the ball over from five yards.
But Danns did double their lead in the 65th minute - and the goal was well worth the wait.
The midfielder took Ambrose's chip into the area on his chest and turned in one movement before calmly tucking the ball past Joe Lewis.
Warnock has told the administrators Danns is one of the players who must not be sold off, and his two finishes showed exactly why his manager rates him so highly.
Posh almost pulled one back when Boyd's shot was finger-tipped wide by Speroni, but nothing was going to spoil Palace's day.
Warnock led all his players to the centre circle at the final whistle to lap up the applause and, with any one of them up for sale, possibly to say goodbye.