Help for a Beloved Sweater

[Violet's Pet Spider]

Hi everyone! I'm a beginning knitter, and I think I'm in love ! Of course, my mind seems to work faster than my needles, so I'm already planning projects that are *way* down the line for me.

My question is that I have this sweater that I love. I bought it in Ireland, and it is this wonderful, chunky, sheepy pullover. The only problem is that it is *huge* on me, and I rarely wear it even though it is so meaningful to me. I love the yarn and the memories, although the shape of the sweater is nothing special.

Now that I've started knitting, it occurred to me that I might be able to transform it into something I'd love to wear on a regular basis--a nicely fitting cardigan, for example. Now I can't decide, though, if I should cut it up and sew it back together (I've seen a few online tutorials for things like this) or if it is possible to "unknit" it and reknit it into something different. Would I have enough yarn if I did this? Like I said, the sweater is enormous, and has some cables, so it seems like a lot of yarn.

I'm pretty handy with a sewing machine, so in some ways, that seems like the obvious option, but I'm also terrified to cut this lovely, handknit sweater! I'd also worry that the cables and pattern might look funky if I tried to force it into a new shape (particularly a fitted one--right now it is kind of a fisherman looking crewneck). So knitting would allow me to choose a really appropriate new pattern.

On the other hand, I've never actually knit a sweater before, so I'd probably want to practice with some yarn that didn't have so much sentimental attachment for me first if I go that route.

Any advice?
Thanks!
Heather