In the filters menu is a filter at the top called liquify. It loads up your picture and allows you to nudge areas around according to brush size, density and pressure. Its the perfect thing for the task.
Once you have the shape, use the patch tool, and clone tool to remove wrinkles and lines.
Heres a guide on youtube
[youtube]<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/o8vynqUWnKI&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/o8vynqUWnKI&hl=en&fs=1" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>[/youtube]