Taking a hint from Grizzly Outdoors, I used a hair dryer to warm up the kydex and loosen the knife a bit. It was tight before, now its just a quieter click to insert and withdrawl the knife. It won't fall out of the sheath as it still requires effort. There is just a slight bit of wiggle now. I also shaped the thumb ramp just a bit more for better contact.

On the knife itself, I file the back spine and then took a coarse stone to it to sharpen the edge. This makes it easier to create sparks from the ferrocerium rod.