One of the most important and overlooked parts of embroidery is the blocking. Some things we do to the fabric will not iron out, certain stitches pull the fabric diagonally away from the straight grain of the fabric.
What you will need to do is block it. I like to place the embroidery face down and work from the back of the design but for this explanation I have the embroidery face up so you can see what I am doing.
I have a one inch padded surface with a inch gridded printed on it. I pin the embroidery along one edge of the fabric and try not to pull the fabric in any direction because I want to true the design. So at this point I just want to get a straight edge. Then I go to the opposite side and make sure the fabric is smooth and flat as I pin the opposite side. I check to make sure the design is straight, then I pin out the top and the bottom of the embroidery.
At this point the fabric is smooth and flat. I make sure that the design is straight and not pulled in or out at any point. As you can see in the photo the left edge of the fabric is pulled in along the line that the design is on, at least at some points. If I pulled the fabric out to make it straight along the edge I would have distorted the embroidery.
It usually take several pinnings and unpinnings to get all this fairly straight with no pulled or wobbling edges on the embroidery. Don't focus so much on the edges of the fabric, instead look at the embroidery and get it straight at its edges.
Then I iron my work, no steam or water, I cover it with a white muslin pressing cloth before I press it. I do not drag the iron across the embroidery, but pick it and place it down as I cross the embroidery. Use a hot iron, but be sure to test it so it does not scorch your embroidery or the pressing cloth.
It may take several passes with the iron to get everything smooth, then I leave it pinned for a week in a safe, dry place with the white muslin over it so no mysterious accidents occur.
By the way that is a June Tailor Quilter's Cut and Press II, I can flip it over and use the rotary cutter if I need it. Pretty handy tool. It's old and may not be called this anymore, but there is a similar one on Martha Pullens website. 2006, Linda Fontenot, www.AmericanFolkArts.com