I ended up wet blocking the blanket (i was using wool) and it really helped out. The diamonds are way more diamondy now and the area between the smocking stays roundish. I really love how it turned out - unfortunately my camera skills are kinda sucking today (bad light and laziness) but you can get the idea:
That is beautiful! I never noticed it in the mag - now I will have to go back and check it out. I find that my favourite thing about craftster is seeing projects I didn't like or never noticed made beautiful by fellow knitters. Sometimes it is just a colour change or a simple mod that makes all the difference.