Aim offset problems (Animations clipping/rotating incorrectly)

The montage plays fine without the aim offset but then you can only attack forwards. Which isn’t surprising. When I’m not using the aim offset I use mesh space rotation blend so that the arm at least always points forward instead of rotating with the torso of the character. I tried disabling it when the aim offset was plugged in.

The animations in the attacking montage was set to additive. I disabled that now.

I’m currently in my backup project where I mess around with animations. Things got a bit messy but so far both the attacking and the aim offset work fine independently. Managed to get back to my previous best attempt that I didn’t show before because I thought it was lost:
http://pahlavan.se/dump/2014-08-21_16-02-44.webm
I apologize about the terrible framerate in the video, ShareX is giving me a hard time for no good reason. But hopefully the problem is visible.

Standing still the aim offset is fine, when running it clips through the body it seems but that is probably just problems with my animation. The main issue is that the arm flips upwards when attacking. The behavior is the same when mesh space rotation blend is off in the layered blend per bone node.

Feels like I am missing something very trivial.