At least theoretically, the forearms should be following the shoulder when the arm's bent; any problems with them shouldn't show up until the forearm is bent.

In the pics conformed to Mike, do you have Mike's body part selected, or the tunic's? I can't image why the spherical zone is changing if its the tunic's.

Are you moving the arm with the collar or the shoulder body part? If that's the JP for the collar, you're OK, but if it's for the shoulder, I see your problem. Let me mark up one of the pics...

I know you tried changing the spheres, but if that is the shoulder, without Mike in the scene try scaling each sphere up 200% or 300% and see what it does. That may make stuff move that isn't supposed to, and that's OK; I just want to see if it'll absorb the chunk that isn't moving.

It's really looking like either the JPs are off, or there are a couple of polygons that are misgrouped. They may be in a group, which is why they didn't show up in the "no bone" group, but in something truly bizarre, like left foot.

What happens if you turn off the "use spherical falloff zones" checkbox? Other parts of the bend will deform oddly, but does that area join the rest of the arm? I don't see the JP arms or center in your screen captures; are they not showing up on your screen, or are they maybe in some odd place?