well begun but not half done

Five years ago I got a wild hair that I wanted to make myself a denim jacket. It took five (5) consecutive muslin mock-ups to get the shoulders to fit and to function. I did it, but it took a while... Now I want to make a raincoat. This will not be easy, not because I lack sewing skills, but because fitting my shoulders is hard. I have very narrow, sloping, kind of rounded, shoulders. That are about a size 2. The rest of me is not anywhere near that small.

I have a pattern that I want to use, the Baltimore Coat. Since I know that the pattern will not fit well right out of the envelope, I figured that the best way to start was to cut out a first muslin using only the upper half, above the lengthen or shorten line, since everything below that is no trouble at all. I used some heavy flannel, not at all drapey or soft.

The good parts are: All the pattern pieces fit together easily, including the set in sleeve, which I was afraid would require excessive easing (which will not work well in the actual raincoat fabric). The shawl collar is drafted well, it curves beautifully around the neckline, and converts easily and gracefully between a v-neck and a higher buttoned closure. The size coat that matches my measurements is definitely roomy enough to wear a sweater underneath, a necessity in the cold winter rainy season.

The bad part is:

.

I tried several times to get a better picture,
I think my camera was horrified at the sight...

The shoulders and armscye are completely unworkable. The shoulder seam is at least two inches too long for my arms, and the armhole opening starts about three inches too low. At least. The result is that I can't move my arms with any comfort at all. Does it make more sense to try and morph the jacket shoulder and sleeve combination that do fit me (from the denim jacket) onto this pattern, somehow; or does it make more sense to start the fitting process over from square one since the sleeve is a different kind of sleeve (one-piece as opposed to two-piece)? Is there a reason why a two piece sleeve would not work for a raincoat? So many questions from only a short sewing session...