I am looking for a way to make the image below straight - like in the line. To make it clear - it would be a tattoo template, which will be placed around my upper arm.
Is there any solution of this, in Photoshop?
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It won't be perfect but you could use a Polar Coordinates filter (Filter → Distort → Polar Coordinates...) set to "Polar to Rectangular" on the image:
The result will be "straight", but will be distorted so you'll at least need to adjust the height to compensate. This is after transforming the layer to 50% height:
With a further bit of correction using a mesh warp (Edit → Transform → Warp):
This can be done. But not done very accurately. There will be some warping and distortion when you straighten it out. That said, here's what I would do.
Put each piece on it's own layer.
Then use the Puppet Warp Tool (Edit > Puppet Warp) to straighten each piece out. Add points along the curve and align the points and image into a straight(ish) line.