The pattern is poorly designed and it looked like it was hitched up under her arms. It is supposed to be a bit above the waist, but it looked really silly and never ceased bugging me.
Finally this year (after she grew SO many inches) I just couldn't stand it anymore, so I bit the bullet and came up with a fix.
Original, per the pattern
The back was already taller than the front, of course, so I finally came up with the idea of making "extensions" to the front of the dress. It turned out really well and looks cute. The arm holes are now rather low, but on a little girl it really doesn't matter--it will be cooler!
Bodice detail - puffed inserts
Nana, at least, is MUCH happier now.