Eliminate the molding, just scribe the beam wrap to the ceiling. That will give the least emphasis to the discrepancy.
Casey

We didn't think of that - how would you suggest we make a template? Is there an easier way than trial and error with construction paper and scissors? Thanks again.

There is an easy way. It's very simple, although it may sound complicated at first. I'll give you an example using some assumed measurements for your situation, and you can adjust to what you actually have. You will need a facing board whose width is just a little more than the greatest distance between the bottom of the beam and the ceiling, at whatever point that occurs.

Let's say that the distance from the bottom of the beam to the ceiling is 6" at its greatest point (presumably one of the ends). Mark a distance on your board of, say, 6-1/4" from its bottom edge (so that, when you are done cutting, the facing board will give you some wiggle room by hanging down about 1/4" below the bottom of the beam). Then put the board in place so it butts up against the low center point, plumb it horizontal with your level, and fix it in place (2 nails?). Then, get out a drafting compass (you know, those things you use to draw circles on paper). Set the distance between the points of the compass to the distance between the ceiling and the pencil mark you made. In the next step, make sure that the distance you set the compass points to doesn't change as you are working with it. Then, simply run the compass point along the ceiling and the pencil point along the board, from one end to the other. The pencil will mark a line on the board that exactly conforms to any deviations in the ceiling. Take the board down, cut along the marked line with a saber saw, and you're ready to put it in place. If you've been able to follow my instructions, you will have a board that conforms to the irregular ceiling and hangs down about 1/4" lower than the beam at all points. Do the same thing for the other side of the beam. Then nail a third piece across the bottom and it's a wrap! If you have any slight gaps when you're done at the ceiling line, you can put a small piece of trim in place that will hide them. Hope that's clear.

The link below (illustration 5) shows how to use a compass to scribe an irregular surface in a different application, but, hopefully, this may help your understanding of the technique. Let me know if you need anything clarified.

Here is a link that might be useful: Scribing with a compass

I have a 1928 home with the same issue. I have 20' beams carrying the second floor and they are sagged out 1.5 inches. I am doing the entire first floor in western red cedar since it fits the cottage style of this converted tavern. I have had to make everything from scratch including my kitchen cabinets and mouldings since it seems noone sells anything in cedar anymore.first made 5.5 inch crown moulding in hopes it would show less than it did with the old cove mouldings that finished the beams but it was still an attention getter. So I decided to try three piecing the crown and guess what...looks alot better. You still see it but it actually seems to be a nice characteristic now. You just put a moulding straight on the ceiling and a moulding straight on the beam wrap then put your crown between. It blends and noone else ever sees the curve. I see it but am fine with the character of it.

Kudzu9 - of course! What a good idea - simple, once you think about it. Thanks for pointing it out. If we end up contouring our woodwork, I'll plan to do it like this.

silent1pa - that's what I'm hoping for, that we will be the only ones to actually know just how much character this house has! Congrats on having found a successful design.

Thanks to everyone for their suggestions - we bought some new, wider boards and have successfully scribed our first one! We ended up using the compass to trace a line on posterboard. After cutting out the paper, we taped it to the board and used a jigsaw to cut the curve. Although the paper intermediate may have added some steps to the procedure, it was easier for us to confirm we kept the right distance from the bottom of the board. The fit to the ceiling wasn't exact at first, but sanding the edge really improved it. Thanks so much for the pointers!

The first board is as close to the ceiling as we're able to get it, and it definitely minimizes the curve. There is a small gap, however, and we're curious how you would suggest treating this. The ceiling is white and the board will have a red oak stain, so will be fairly dark. Would you suggest filling the gap with anything? I've heard painter's caulk that could be painted the ceiling color (with a really small brush!), and stainable wood filler that could match the beam....or do we leave it and think that it is SO much better than the first attempt that it is perfect the way it is? I'm wondering if the gap will even be visible once the board has been stained.

How big is the gap? If it's no more than 1/8" or so, I would use painter's caulk only...you'll be surprised how it will make the flaw disappear. It's always a hassle matching wood putty color to real wood, and often draws attention to minor flaws, so I would avoid using wood filler along the ceiling joint. In addition, it may be best to stain the board before you mount it in place.

As for the caulking, use a water base, paintable, latex caulk. Run your bead of caulk, and then use a very moist paper towel along the seam: it will press some caulk into the joint, it will smooth the seam beautifully, and it will clear away any excess amount. The idea here is to leave as little caulk as is necessary to make the gap disappear. If you smear some on the board, you can just use a wet paper towel to clean it off, if you do so in the first few minutes before the caulk sets. If you do the caulking right, the joint won't even look like it's caulked, especially after it's painted. Once it's dry, you could just mask off the board with tape and paint the seam easily that way (make sure you use the blue tape, and press it down firmly to avoid paint creeping under the edge).

Two other tips:
1) for the remaining board, try doing the scribing directly on the board now that you have the hang of it. Any time you transfer a pattern like you did, using an intermediate, it introduces small deviations.
2) you mentioned sanding the edge to get a better fit. One other thing you can do, if you haven't already, is to back- bevel the edge. That means that you plane or sand the top edge in such a way that the top edge of the board slopes away toward the back. Often, when you are trying to deal with a joint where a vertical surface (like the beam) meets the ceiling, there are some imperfections in the angle that can hold the board or molding away. If you relieve the back edge that fits into the angle there, the wood will fit better/tighter.

Overall, it sounds like you're doing great, though!

Board #2: much easier! We scribed right onto the board this time, and you're right that the initial fit to the ceiling is better than it was for the first one. The board is very close to flush for much of its length. Of course board #2 is closest to the short end of the kitchen/breakfast room, so you can't see the top easily - board #1 is towards the long side of the room, where you can stand back to really get a good look...! The new trick was getting both boards level relative to each other - but we're finally ready to get staining.

The gap on board #1 is less than 1/8", so it sounds like the caulking plan might work. If we're lucky, we may just need a minimal amount.... I'm looking forward to seeing what it looks like with the stained boards up!

Thank you again for all the tips and advice! Much appreciated.

Hearthside-
You've been busy...you must be a quick learner. I'm happy I was able to help a little.

Significant other got a brand new table saw over the weekend...does that explain? :)

Sounds like a serious obsession!