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wet sand=1500-2000 grit, wash, rinse, rinse some more, clay bar, wash & rinse(The whole hood), dry, polish the area of wet sanding once the area is swirl free...polish all of the hood, wax, enjoy.
The bad news is that it doesn’t stop peeling. The only sure way to properly repair it is to sand it down, re-base and re-clear. You can try sanding down just the clear but since the base is so thin, you will most likely sand through it before your finished. But it's worth a shot.
If your aren't ready for a re-paint, you can try touching up the area with a spray can of clear, or try some of the other suggestions mentioned above, it might get you by a while longer.
clay bar? what exactly is clay bar for the idiots amongst us?
Idiots? No, just uninformed.
Clay bars are to remove "above surface contamination". When you wash your truck (and dry) run your hand across the surface across it. If it feels "bumpy", or "gritty" you have "above surface contamination". When you use the clay bar, you will "sheer off" the contamination. The contamination will make shadows and uneven shine when polished/waxed. If you are going to clay bar, make sure you use lots of lubricannt (comes with the clay bar usually). I go to www.meguiarsonline.com for my detailing info.