Burn, do not oversoak the sheath. Run some hot water over the sheath just till it is evenly wet, just move it under the stream from the faucet till it changes color all over. Run water into it quickly and dump it out. Leather should be toatally moistened but not soaking wet. I like to wrap my knives in 2 layers of saran wrap for shaping sheath. Insert the knife into sheath and use your fingers to start pressing down along the outline of the knife. I like to have the sheath laying flat on a clean surface because the side you want shaped is the front(opposite the belt loop). Be careful not to let your nails dig into or scratch the wet leather because you will not be able to get rid of these marks. Also make sure hands are clean because dirt marks will stay too and you will have to use very dark dye to cover it up. Work the leather around the contours of the knife pressing down firmly all around. Work the knife in and out of the sheath a few times. I like to really press hard and get a tight fit. Don't worry, when you remove the 2 layers of saran wrap from the knife it won't be too tight. When you're satisfied with the shaping,let the sheath air dry without the knife in it. I like to put the knife back in every hour or so as it is drying and keep shaping.You can also put a belt through the loop a few times with the knife in sheath to shape the loop too. Remember, work clean.If you didn't oversoak the leather, should dry nice and shaped in about 24-36 hours.
BTW-I have also used clean acetone instead of water and it dries in an hour or two, but I know alot of leatherworkers don't reccommend this. The best instructions for a simple pouch sheath I have seen are in Loveless's book, How To Make Knives. You can also ask Gary Graley any questions, he is a master sheathmaker and heck of a nice guy.
Hope this helps.
