The new armature system of 2.40 is weird.
I had this model of person I had rigged and posed in blender 2.37a with their hands on their hips. Then I opened it in 2.40 and the arms were all screwed up. So I pressed TAB twice it fixed it somewhat. But the arms are out sideways now. So I pressed rotate to bend them towards the hips but they won’t budge! They just keep spinning the shoulder around.
I have no idea why it’s doing this!
Any help here would be hot 
I had a problem with this too, I’m not sure if it will help you, but remove the parent relationship from all the IK solvers
Wasn’t aware I had any. How do I delete them?
you probably don’t, but go into edit mode and select the IK solver then under “Armature bones” click the box to the right of "child of’ and click the grey space (not any other bone)
Anyway, try uploading the .blend file
http://h4x.snipanet.com/blender/
or
http://h4x.snipanet.com/blender/mirror/super_scene.blend
Uploaded it!
Here’s what it should look like:
Any help is greatly appreciated, as I would love to finally finish this piece.
THANKS!
P.S. If I linked it wrong, go here:
http://h4x.snipanet.com/blender/index.php
and click super_scene.blend
I know it’s going to be a bit of a pain and I know I’m not a rigging expert, But I think you should re-rig them. But all the IK solvers did have parents, so I removed them, but there was still something else wrong with the parenting what-not.
From what I can see (and IK still bamboozles me a little) your IK setup here is circular and causes all sorts of trouble when you try to move it - I think.
Before starting again, just select the whole rig in Pose Mode, Alt-I (remove IK) and see where that gets you. The arms do return to correct position and from here you may be able to save it. If you need to, you can rebuild the IK setup from here and it should be fine.
You may need to add IK to the feet/legs depending on your animation plans.
You’re a genius AndyD! Worked straight away. Thanks heaps!
Also thanks for helping out Alex_G, glad I didn’t have to re-rig though :S
Finally works! Very pleased.
Cheers 