WOW! i would remove the border- cut it to the correct size (if it can be pressed flat once it is removed from the quilt) then using sashing strips re-attach it straight. in the (quilt as you go) method.
it is a beautiful quilt- i hope it works out-
and it may have been the batting that shrunk---not the fabric- did you follow the laundering recommendations for the batting? Batik's really don't usually shrink like that- i would bet it was the batting- not the fabric.