Can you tell us how you have the arm groups set up? Perhaps a screen cap of the rig panel.
If they're distorting weird then most likely a) they're not independent or included in a bigger mesh/group that is being calculated as part of the artwork, b) they're set to rectangle or auto instead of contour under layer mesh in the right properties, and/or c) they're missing sticks, staples, or other hallmarks of a normal arm.
To me it sounds like you want to put your draggable arms in their own independent group and create a system where you're key trigger switching between either draggable arms or cycled arms. The upcoming July tips video will actually show one way to do this (and how to switch between arms going in front or in back of a puppet).
Yes. I looked at the mesh and the draggable arm's mesh incorporates the triggered arms with it. If I put the triggered arm animation in its own group how will it know to hide the draggable arm? As a test, I dragged the triggered arm group out of the arm group and left them in the body group....it hid the entire body when triggered (since its in the body group). I look forward to the July video because that is exactly what I'm trying to do. Is there any way you can help me in the meanwhile??
I ended up only covering draggable arms going front/back, but this should still help: https://youtu.be/RPF0K5Dg8X8?t=9m13s
Basically you need to set up some kind of system like that shows where you're swapping between blank / normal states. So instead of front / back in that video, imagine if it was draggable / cycled you were swapping between.