Preheat oven to 350 degrees.
In a medium bowl, mix together the first four ingredients. Add the milk and the 1/4 cup of butter, cutting it in and mixing till smooth (although it will be lumpy with the oatmeal).
In a large saucepan over a medium high heat, mix together the white sugar, cornstarch and water. Add the peaches first and cook till bubbly, about 5 minutes. Add the blueberries and cook another 5 minutes. Add the 1 tablespoon of butter and the lemon juice. Now add the nutmeg and cinnamon. Mix well until butter is melted. Remove from heat.
Pour fruit mixture into an ungreased 1 1/2 quart baking dish. Spoon the batter over the top of the fruit and place in the middle of the oven and bake for about 30 minutes or until the crust is brown and cooked all the way through. Once cooked, allow to cool for about 15 minutes before serving—enjoy!