Use a hairdryer on hot and high. Be carefull though because the Kydex gets hot! Keep the blade in the sheath, and use gloves to re-mold the sheath around the blade. Hold it for a couple minutes to let it cool a little, then set it somewhere flat for an hour. If it's still not tight, do it over again. It works, I've done it on several sheaths.
The first advice I would give is to contact the person who made the sheath. A custom sheath can cost $25.00 and up to replace if you mess it up. Chances are that you if you give the maker the opportunity to guide you through the problem they would be more than happy to replace your sheath free if anything should go wrong.
I will also caution not to use a hair dryer on holsters and sheaths if they are of complex geometry. Gloves and a hair dryer may work on the fold over variety sheaths but you might be in for a surprise with sheaths that contain any features that contribute to retention. You don't want to end up with something looking like saran wrap draped over a knife.