I haven't made this yet, so I might be totally off base... but I'm going to try.
Looking at your picture [the close up one], if you look... following the right side of the piece... you have dropped what looks like a half shell pattern [you can see at the bottom the half shell, then at the top it goes away]. But I think you're supposed to do that.
From what I can tell is that you're doing the neck shaping. I looked through the pattern and as best as I can tell [short of actually crocheting the sweater myself], is that you're doing it correctly. Remember that you're going to go back later and add a border all the way around the sweater, so that will give it the nice squared off look that the picture in the book has.
Unfortunately she doesn't given a close up of that section of the sweater in any of the photos.
If you have followed the pattern correctly, keep going. I think its going to be one of those things that will just come together in the end. I can see why you're dismayed, but I honestly think that when you get the border done, the neck shaping will look totally fine!