Originally Posted by Jan in CA
Yes, that is called steeking. Its best done with 100% feltable wool, but can be done with other yarns if they are well secured.
I'm not sure how you'd use it for this problem though.. Can you just ease the top of the sleeve into the sweater instead?
I don't know enough about steeking to say one way or the other what it can be used for, I just remember my girlfriend getting a "repair job" from the yarn store that involved a customer who ignored the warning about taking time to save time and checking gauge. As a result, the lovely cabled sweater she'd made for her husband came out large enough to house a tribe of pygmies from some obscure island nation in the Pacific rim. Seriously. I'm an even six feet and about [ahem] 185 lbs and this thing swallowed me whole. So unless this woman was actually married to the entire offensive line of the New England Patriots, she overshot it a bit.
Anyway, Wendy was understandably reluctant to start cutting on this sweater, but she'd already gotten enough yarn out of the sleeves to make a Lhasa Apso and there was STILL a wad in the armpits the size of a baseball. The length was easy enough to fix (which is where the Lhasa came from), but the circumference... not so much.
So she read, and consulted and studied and plotted and measured and finally steeked. And in the end, the customer went home with a sweater sized for a mere mortal and a life lesson to TAKE TIME TO SAVE TIME. ALWAYS CHECK GAUGE!
So I know it's been done (at least once), but don't ask me how she did it. Actually, I couldn't explain how she does most of the repairs she does.
In fact, this might be the route the OP wants to take. Go to the LYS and see if they have someone either on staff or that they contract such work out to and let THEM do it.