Did you open it with

        open my $fh, "| pgp -f ..." or die ...
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or did you perhaps use the -f option with backticks?

I don't know the specific version of pgp, Corion's seems to read from STDIN when -f is used, so this would just wait for your input from the keyboard (with backticks) instead of open "| ..." reading from the file handle.

Update: Better style: Three argument form

        open my $fh, '|-', $cmd or die "failed to execute:\n\t$cmd\n$!
+";
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References: qx and Quote Like Operators for backticks, Using open() for IPC for open