I'm in the same boat - almost 39 weeks, barely 2cm dilated and the baby is still high up. This is my second pregnancy too and I was told that once the baby drops you are in labor or just about to start, so it still could happen at any time.
It's hard for them to make a true judgement about your baby's size - they are just estimating. Don't let it scare you. And like "almonkey" said, even if it is a big baby - doesn't mean you'll definitely have a C-section. People have big babies vaginally all the time
I've just been walking everyday, drinking my red raspberry leaf tea, and taking evening primrose oil to help things a long. I did this with my first pregnancy and I was a week early with a 6 hour labor. I hope that happens again!!!
Good luck to you!