Bill Jordan mentions what you've described in his book, "No Second Place Winner." I'll quote verbatim:
"If your holster is not preblocked, here's the way to go about it: throw it in the horse trough, or some other vessel of water, and let it soak for about two hours, until the leather feels soft. This will not harm the holster in any way. Shake off the excess water and wipe dry. Carefully insert revolver, which has been lightly oiled all over, inside and out. Be sure that the barrel centers the holster. This you can tell by noting that the ring left by the end of the barrel on the leather plug closing bottom of holster is centered. Work the leather wiith your fingers until it perfectly matches the contours of the gun. At this point, the gun should be removed, wiped thoroughly dry, and re-oiled. Now, put it back in the holster and let it dry overnight. A good trick at this stage is to line the holster with a small piece of the thin plastic bag cleaning companies use to protect clothing. If you do this, be sure that it is not bunched, which might spoil the contours of the holster. The next morning, remove the gun (and plastic if used), cleanit again to be safe, and lay the holster up to dry for at least two additional days.'
'Rubbing alcohol can be substituted for water in the above process. Slightly more costly, it is less likely to cuase rusting if you were careless about oiling your gun...'
'One last comment on the 'water treatment.' In time, the leather, regardless of the quality, will soften from usage. This can be remedied temporarily by soaking and allowing to dry without the gun. Some shrinkage occurs and the leather will be hardened in the process. Naturally, it will not hold its hardness as it did when new.'"
Like Rosco warns, so does Jordan about oiling a holster. He states that it will, like water, cause the leather to stretch. Jordan recommends wax shoe polish for both appearance and protection of your holster.
Please let us know how your holster turns out.