This is such a good way to use damaged Tshirts (that are old friends) - I love how the logo gets saved and gets to be just in the right place.
Make sure the pants fit by measuring that curve after you've cut the sleeves off (remember to add some on for the waistband). It should be the same length as the from front to back inbetween your legs (yeah I know it is a funny measurement to have to take! but it makes for more comfy shorts). Cut the curve a bit deeper if you need to.
Made these 3 pairs as part of an Upcycling Challenge over at The Sewing Forum :
http://www.thesewingforum.co.uk/showthread.php?t=20538&page=3