We present results from a 140 ks Chandra/ACIS-S observation of the hot gas around the canonical FR I radio galaxy 3C 449. An earlier, shorter 30 ks Chandra observation of the group gas showed an unusual entropy distribution and a surface brightness edge in the gas that could be a strong shock around the inner radio lobes. In our deeper data we find no evidence for a temperature increase inside of the brightness edge, but a temperature decrease across part of the edge. This suggests that the edge is a "sloshing" cold front due to a merger within the last ~1.3-1.6 Gyrs. Both the northern and the southern inner jets are bent slightly to the west in projection as they enter their respective lobes, suggesting that the sloshing core is moving to the east. The straight inner jet flares at approximately the position where it crosses the contact edge, suggesting that the jet is entraining and thermalizing some of the hot gas as it crosses the edge. We also detect filaments of X-ray emission around the southern inner radio jet and lobe which we attribute to low entropy entrained gas. The lobe flaring and gas entrainment were originally predicted in simulations of Loken et al. (1995) and are confirmed in our deep observation. ; Comment: 13 pages, 12 figures (Figs. 2, 3 and 8 are of lower quality), accepted for publication in the ApJ