The lattice looks like it has been twisted in 2 different spots. Try to select the lattice point on those two sections and move or twist them out to get the shape back to normal. (Its should be square all around) Im pretty sure thats why your getting the weird defromations.
A alternate way of doing the arrow, is actully bind it to a skeleton about 4 or 5 joints and make a spline ik for animaton then attach it to a path
This link is a sample of a fish animatic I did that is done with the alternate solution. similar to the arrow.
If that dont work i'll keep thinking of other ideas.
I am enough of an artist to draw freely upon my imagination, knowledge is limited, imagination encircles the world. (Albert Einstein)