This will be a long, geeky knitting post, just as a warning to those of you in my small audience who could care less! Also, see update at bottom of post **
As mentioned earlier, I have been working on the Adult Tomten Jacket by Elizabeth Zimmermann, for me and using some of my handspun yarn. This pattern can be found in several Zimmermann books: The Opinionated Knitter, Knitting Without Tears, Knitting Workshop. It started out as a baby jacket and therefore the adult version is rather large and boxy, with its signature feature perhaps being the very deeply set in sleeves.
I had found a nice discussion of modifications for a better fit on Jared Flood’s blog, “Brooklyn Tweed.” He has a lot of excellent photos and some discussion, but not everything he did is spelled out – which is fine, he put a lot of work into that blog post as it was, and a knitter doesn’t have to give away every little secret!
I wanted to incorporate a shaped sleeve cap from the top down, as Jared had done. The basic method is described in Barbara Walker’s excellent book Knitting from the Top, now back in print thanks to Meg Swansen (Elizabeth Zimmermann’s daughter and a prolific designer, teacher and writer herself) at Schoolhouse Press.
The problem that comes up in this instance is thus. Normally, you figure out how big around you want the sleeve and therefore how many stitches you should have on the needle once you end the sleeve cap and have arrived at your upper arm. Using the Zimmermann/Swansen EPS method, that means 35% to 40% of your body stitches for a good fit in that area. So that is the number of stitches you would normally pick up around the armhole to begin the sleeve cap, after subtracting the number of stitches left on a holder for the underarm. But this is a garter stitch jacket (garter stitch – knit on both sides, 2 rows makes a “ridge”). Garter stitch has a compressed row gauge compared to stockinette stitch, so that the number of ridges per inch lengthwise is the same as the number of stitches per inch widthwise. So you have to pick up one stitch per ridge around the armhole or the sleeve fabric will not lie flat. This means you will have way more stitches than you really want in your sleeve at the upper arm.
Using my gauge and my size, I have 152 body stitches so I would like to have 53 to 61 stitches at the upper arm. I have 38 ridges on both sides of the armhole and will add one stitch for a “phoney seam” at the top of the sleeve. I have left 8% of the body sts on holders for the underarm (12 sts). So I will have to pick up 38 + 1 + 38 = 77 sts around the armhole. Add the 12 underarm sts and I will have 89 sts in the sleeve at the outset of cap shaping. So I need to get rid of a whopping 28 to 36 sts somehow while shaping the sleeve cap.
I study Jared Flood’s photos and observe: (1) a line of paired decreases running down the top of the sleeve (this is the way the pattern is written, too), (2) it looks like he started those decreases up above the sleeve cap, in the top part of the sleeve that is so deeply set in that it is actually part of the body, and (3) there appears to be a little triangular gusset on both sides of the underarm area at the end of sleeve cap shaping. Hmm, what’s that last thing? Curious.
So I rip the first 13 ridges of the top of the sleeve back, and add 4 paired decreases every 3 ridges. This takes out 8 stitches so I am down to 69 + 12 UA (underarm) sts at the beginning of cap shaping. It also adds a shoulder slope which is always a good idea. Now all of a sudden the reason for the triangular gusset becomes clear. If done with short rows over 6 ridges, it can consume the rest of the underarm stitches (6 on each side), but the needed underarm space is still provided by the curve of the line along that gusset. If I get rid of the 12 underarm stitches at this point, I am already down to 69 sts only at the beginning of cap shaping, and if I continue decreasing in pairs every 3 ridges while I knit the cap, it comes out just right at the end with 55 sts remaining. Hooray!

Sleeve top and one underarm gusset completed
Here’s a low-tech drawing:

layout for underarm gusset and shaped sleeve cap
And here is the sleeve cap, shaped with short rows per Barbara Walker’s instructions:

Finished sleeve cap
And the try-on: it fits beautifully and I am most pleased!
** Nov. 11, 2009 update:
I wrote to Jared Flood about a week before proceeding with the above, and bless the man’s heart, he did write back to me on Nov 5th. He said he did not actually make an underarm gusset, but did shape some stitches next to the underarm stitches to try to mimic a set-in sleeve armhole rather than just leaving it square. So it looks like I may have “unvented” something with the gusset, but I am still happy with that as another approach.