The Collaborative International Dictionary of English v.0.48:

Peninsulate \Pen*in"su*late\, v. t. [imp. & p. p.
   Peninsulated; p. pr. & vb. n. Peninsulating.]
   To form into a peninsula.
   [1913 Webster]

         South River . . . peninsulates Castle Hill farm. --W.
                                                  Bentley.
   [1913 Webster]