I used the filter Distort>Lens correction first, because it does a good job of adjusting the horizontal and vertical proportions. The task was made a little difficult because, I believe, the image had been cropped so that the distortions weren't evenly distributed. This throws off the filter adjustments.
I finished correcting the distortions with the Transform warp and Free transform tools.
When changing perspective of an image, it creates angles that would be "impossible" in a real view. Better results can often be obtained by taking the picture with the camera held level to the horizon, then crop out the excess foreground.


forum discussion: http://forums.dpreview.com/forums/read.asp?forum=1006&message=31409743
original image by mehigh: