I just ran a fatigue test to compare shot peened and non shot peened 17-4PH material. To my surprise, the shot peened material had a lower endurance limit. This seems really strange. Could residual stresses (due to a forging process prior to shot peening) cause this to happen? Also, the critical area to be shot peened had a 90 degree bend and a .015" radius.

Has anyone else had negative results due to shot peening? If so why?

It is quite a common finding to people who investigate shot peening and fatigue. Becuase you increase the roughness of the material you are basically decrease it's endurance limit. That means that if your residual stresses are not enough to compensate for that or they are not stable you will end up with a lower limit.