I love this in every possible way except for the sleeve length. How do you feel about perma-scrunching? What about altering it with an extra stitch or two so that it's really, truly perma-scrunched?
ETA: Sorry, I'm too slow. I left this window open for a while and didn't see the last 4 hours' worth of replies. Suz, I have 100% faith in your intuition and decision-making process so if you feel this needs to go back and/or be sized up, I'd put my money on you every time. Also, what Una said. XO.