Your main problem with that model is that the shoulders are far broader than they should. There is no way you can try to fix that and be comfortable with the results. What you should do is modify your model's topology so when both arms go together in front of the chest they don't overlap so drastically with it. So in short, give the model a narrower shoulder span and it should deform very nicely. You are still going to get some slight overlapping, but it happens with all skeletal animation systems, even today. That's why shape animations where created for.
Former Dark Forces Mod Modeler, Texture Artist and Researcher.
Father of Jedi Outcast and Jedi Academy animations.
- Boba Fett v1.0