I just replaced the bars on my Waterford.

My shoulders measure 38 cm, I got a pair of 40cm Salsa Short-n-Shallows. (the old bars were 42 or so Cinellis)

I really like the Salsas! I like the ergonomic drops. The reach isn't all that short, and you have a good bit of leeway on the curves as far as where you want to put the hoods, so you can adjust the reach a bit that way. I tried Ritchey Biomax Pros, too. They felt much the same as the Salsas to me, but the Salsas were about half the cost.

As far as I know, the reason for the flared drops is so you don't smack your forearms on the upper part of the bar while you're riding in the drops.