I'm having doubts. I should've trusted my instincts with the ribbed hem of 5 fewer sts than the body. Though it's worked on the same needles, it pulls in, which might be ok for tunic length, but I have a feeling it will fit funny right on my hips.
My instinct is to rip it and start over, because another issue is with lace pattern repeats on the neck shaping. If I leave out stitches and maintain the lace pattern when possible, it looks weird. No wonder the model in the magazine is wearing a huge flower, in the exact area where I'm having trouble!
I plan to rip back to where the armholes begin and rework the neck line to accommodate the lace repeats. This will probably require a chart. Also, I'm contemplating how to cut the ribbing - yes, that's right CUT - then pick up the open stitches an knit a different hem.