WOW. I think you're dead on. DEAD ON. I never really noticed the peacocking, but I HAVE WRITTEN that one reason I think Federer's volley is now relatively poor is due to his unwillingness to get "dirty". Federer..frankly...always wants to look beautiful. He thinks his game is astoundingly beautiful (as he's acknowledged), he basks in that praise, and I think it's very important to him. That has occasionally hurt his baseline game, but OFTEN hurts his volley. Unless your Edberg, it's hard to always look graceful and beautiful on the volley. It's a bit wild, a bit out of control up there, and sometimes you have to DIG, and sometimes it will be awkard. What i have noticed of Fed in recent years is a tendency to:
1.run through the volley to smoothly, without setting up and sticking it.
2.an unwillingness to get DOWN there, scrape the knees, come to an abrupt stop on the low volley if need be, he sort of runs up, then just drops the racquet head down...and hopes magic happens....if you're not Mcenroe this isn't the best way to do it!!!! In Fed's defense, I'll bet that he can get away with that in practice against lesser balls than Nadal's and/or when he's totally relaxed. In matches, he blows that one too much!
I have written this before, and that is what I have noticed in his volley...I think it ties in perfectly with what you've observed.
He's VERY underrated...in fact, I just mentioned this in a post in some other thread. Yes, he actually seems to be a more effective volleyer than Federer in some of their encounters. I think this is not necessarily due to an inherent advantage in talent, but the fact that Nadal sets up his volleys and then, most importantly, does NOT do #2 above...Nadal volleys with great form. Simple, basic, good form. It works.