I'm not quite as brave as Donni, I didn't take to the jacket with hot water and agitation to shrink it, but I did take to the sleeves with the scissors. Once I'd unpicked the seam I picked up all the stitches with a circular needle before I snipped. Doing both sleeves only took me an evening and wasn't nearly as bad as I'd anticipated. My sleeves look a bit wider than most people's as I put some extra width in my sleeves to begin with (I don't like my sleeves so close fitting) and compensated with extra raglan decreases. I ended up going with these turquoisey toggle-shaped buttons. I'm not 100% sold on the colour, but I can always change them later if I find something nicer.
In hindsight, I would have knit the next size down (but continuing with the extra sleeve width) as the jacket leaves plenty of (almost too much) room for layering underneath. However I've been getting a fair bit of wear from it since I finished it a couple of weeks ago so it won't end up as a knitted white elephant.