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I have only a handful of caps and fabric hats, but in this small sampling I also find them to fit smaller than their marked size. I assume that fabric, once it has gotten wet and then dried, would have more of a tendency to shrink than would a fur felt fedora, which is baptized in steam.
Have you tried wetting the fabric and reblocking/stretching as you might when washing a wool sweater? As you point out, condition of the fabric and thread would need to be good - dry rot is not going to make it through this type of manipulation.
Have you tried wetting the fabric and reblocking/stretching as you might when washing a wool sweater? As you point out, condition of the fabric and thread would need to be good - dry rot is not going to make it through this type of manipulation.