I remember reading that S&W repairs 642's with finish problems so maybe give them a call. However, even if they refinish it for free, you'll probably have the same problem down the line. What are you using to clean it?
My 637 is losing its finish on the grips back strap but I believe that is due to long sweaty handed practice sessions. Although I love the looks of my 637 (and pretty much any j-frame) I probably wouldn't not refinish, even if the wear spreads beyond the back strap.
Mossin, do you have any pics of your 638 you can post? I'd love to see it. Also, I wouldn't mind seeing the OP's gun either.