I duplicated the image layer, then applied the lens correction filter to adjust perspective and horizon level.
I find the lens correction easier to use than Transform because it automatically adjusts the compression to correspond to the edge adjustments.
The sun flare is pushed toward the edge of the picture by the transformation, but it can be returned to the original position by masking the tree area.
The selection illustrates where the image would be cropped to the transformed area. This crop could be extended pretty easily by cloning in the grass/flower in the lower corners.

Forum discussion: http://forums.dpreview.com/forums/read.asp?forum=1006&message=29341872
original image by _Dutch_: