Tara,
It sounds exactly how it has been when I have used the Baba Sling with Harrison... he loves to be curled up though... I adjust him and the sling until I am comfortable... there always is a lot of excess material... but some times I use this to slightly cover him... especially on colder days.
I'm not even sure if we're doing it the right way, but it certainly works for us.
The only thing I can suggest is to put it on, put Leo in it, fiddle around and see how you go.
Sorry I haven't been much help!!! lol