What is it about "knit every even numbered row" that you don't understand?

It turns out that my friend Natalie French (Not French Natalie and not "the other Natalie") is going to have a grandbaby. Whee! So I've decided to make Elizabeth Zimmerman's Baby Surprise Jacket. I've got a bunch of balls of a self striping Regia sportweight sock yarn (Crazy Colors) and thought to make it in that. My gauge was a little smaller than 6 per inch, which is the gauge specified. Plus, I want to make the jacket bigger. I have seen examples done up and they are pretty newborn-ishly sized and this will be a spring/summer baby. I want to make something that fits at the appropriate time. After swatching with a larger needle size, to no avail, I hauled out the cotton I frogged from my two-tone purple sweater and stranded it with the Regia. I swatched a couple of different needle sizes and it was still too small. It shouldn't have been, but it was. So I decided to double strand the Regia. Well, I thought that was too heavy. I remeasured my swatches, this time with a ruler, and discovered that I had miscounted my stitches. I thought I was knitting 14, but only had thirteen. As it turned out, the gauge with the purple cotton was just right! After a frantic run during rush hour, in the blowing snow, to Ruhama's to get size 4 circs and back before the guys installing my new water heater could finish, I began my project. It took me numerous tries to cast on 160 stitches in the long tail method without running out of yarn. I finally accomplished it by using WAAAAY too much and breaking off the excess, as I have lots and lots of extra yarn.

Only this is where I ran into trouble. See the picture. See the mitered corners in the picture. See how the mitered corners in the picture are more like dolphin noses than corners. See Kathy have faith that she is doing it right despite the fact that the corners don't look right. See Kathy trust the pattern. See Kathy reread the pattern. Read, read, read. See Kathy start to wonder when the jacket will aquire some length between all the shaping. See Kathy clean her glasses and reread the pattern one more time. See Kathy eat 85 Girl Scout cookies and go to bed. Good night, Kathy.