I would go with your suggestion. Cut it down into squares and reassemble it however you care to, mixing the colors and the directions of the fabric so it looks random, yet planned. The difference in the width of the squares will not be noticeable at all then. However, from what I can see, there is not that much "reverse sewing" that needs to be done to "fix it." Whatever you decide to do, whoever gets it will love it because it's your first quilt.