Sometimes blender will move the UVs out of the UV coordinate space for imported .smd files. Check to make sure the UVs of the decompiled models are in the correct position. If they aren't move them up.

Yup, that's exactly it.

I'm not sure what to say other than urging you to decompile other parts of kunkka... It's perfectly possible that Valve put his arms and other parts of his body in different parts of the vpk files. You're gonna have to decompile each piece of his body and import them in one at a time.

You probably didn't do anything wrong. If I recall correctly, Valve started breaking up heroes into different parts. You may have to decompile each part individually to get the whole model, but in all honesty, you should just use the Kunkka model in the workshop (unless of course you are having issues with it).

Hehe, np.

There are no tutorials that I know of, but you just do it the same way as you do normally. In edit mode, select the vertices you want to be assigned to a bone, highlight the bone in the vertex groups heading, then press "assign". Repeat this procedure for a different set of vertices and a different bone. The end goal is to have different parts of your model assigned to different bones.

Oh jeez, well it's gonna require a bit of work. You can parent a model to more than one bone, so basically you're gonna need to assign the top portion of your model to the upper arm (like you did) and then assign the bottom portion to the lower forearm. You can do this manually by assigning individual vertices to different bones, or you can use weight paint mode. http://www.youtube.com/watch?v=ccmVq_fTPw8

The bones weights are most likely incorrect, check to make sure your the arm mesh is applied to the arm bones.

I really don't know what's going on. Try using the source SDK to view your model. If you need help using the SDK see this guide: http://steamcommunity.com/sharedfiles/filedetails/?id=157717488

The compiler gives you a .zip file, but it also places the .mdl in your /Team Fortress 2/tf/models/workshop/ folder. Check there.