Now what?

I bought yarn today, Wool cotton by Rowan. I really like this yarn because the wool helps to keep the shape of the garmets but it still has the cotton fell. Whenever I make something with all cotton it grows.
Here is my problem though. The sizing on the pattern is wierd. I know others have voiced this concern but now that I need to start I really need to figure this out. Here is my thinking.
I'm a 36 so know way am I gonna fit in the small 33 3/4 size. and while were at it who came up with 33 3/4 ? But... If I make the next size 39 It will gap out in the front, and that's really not a good look. So my idea is to alter the gauge to get a larger size small. My yarn has a slightly larger recommended gauge and if I change the needle size...... well what do you guys think ?
Obviously, some serious swatching is in order.