Should I apply to graduate school now, or wait a year?

I'm in a bit of a pickle here.

So I'm a physics major, senior standing. For at least a year I have been planning on applying to Ph.D programs to begin graduate studies in Fall 2015. However I recently got hit with a potential setback. I took the physics GRE and got 16th percentile (I know, WTF???). I was honestly just appalled when I saw that score. It seems very odd, because I have approximately a 3.8 GPA in my core major courses, and I was one of three people in my class to win a scholarship our school gives out for outstanding academic performance, twice. Then I get smacked in the face with a 16th percentile.

However, I took the test twice. The 16th percentile was from the September test, and I won't see the grades for the October test until a couple weeks before most application deadlines. Seeing that I didn't feel like I performed any better or worse on the second test, I am not sure if applying to graduate school is even worth it. Even with outstanding letters of recommendation (which I think I actually have a shot at), my GPA, and good research experience in Quantum Optics, admissions committees are going to see that score on the PGRE and toss me out immediately. There's no getting around that.

So my other option is to stick around at the school I'm at now for another year (they don't require the PGRE for their masters program), take a few graduate classes, and then retake the PGRE and apply next fall.

What do you guys think? Advice would be nice. Thank you.