Steve, you're killing me!
No iron on the leather man! I almost fell out of my seat when I read that!
I actually faced a similar situation years ago with a pre-distressed Wested jacket, not entirely unlike the jacket you're having trouble with. It was so contaminated that it had to go in the wash; I knew of nothing else to do, and in my ignorance, I put it in the drier, WITH HEAT! It shrunk, and looked unsalvageable. I soaked it in cold water, and when I'd wrung enough water out of it, I put it on and tugged at the sleeves and body until they were back to where I wanted them. I kept it up until it was dry, then gave it a couple good coats of Pecards. It drank the first coat like dry sponge takes water. Then I wore it again, let it relax, and it came back to life, in many ways better than when it was new!
Let's see the pics, preferably with you wearing it. Leather is a very forgiving material provided that you understand that the look and texture will be irreversably changed. The fit can come back. I don't think it's too late for your jacket, but it may take some work.
Weston