Sizing a paddle seems to be a question with no easy answer - Mike cites the one I think most paddle shops will use and it seems to be fairly accurate, but you suggestion, dudley, strikes me as correct too in certain cases. In my courses I learned to size the paddle by sitting in a chair or crouching to roughly your height when sitting or kneeling in a boat. Holding the paddle upside down with the grip on the ground in this position, the throat or part where the blade begins to widen on the shaft should be about nose high.
On the water, if your paddle blade is fully submerged, this should place the top grip at nose level as well.
I keep my ottertail paddles a little longer, and vary in length Between a 58 and 60 usually - for bent shafts go shorter obviously.
I remember being in boy scouts as a kid and being asked who was paddling in the bow and who in the stern. If you said stern, they gave you dudley's paddle - if you said bow you got one about chest high, no more. It's a wonder I ever took to paddling with a 20 lb paddle in hand.

-Erik