There's plenty of toy arms for programming on every electronics site, including amazon. They're basically just a series of exposed hobby servos mounted together in a plastic skeleton. The motors are pretty much standard. You can even buy them with or without an control board.
Buy an Arduino Mega or something. That way you'll have way more pins that you'll need, and shouldn't hit up against the memory limits. Arduinos have a huge community, and the free IDE has all libraries and everything you need. I bought one and an MP3 shield from AdaFruit last year and successfully made a GNK droid. complete with flashing lights and multiple modes of tranquil gonks.
Can you recommend the names of any off-the-shelf robotic arms or tools that can be modified or hacked?
Any good standard starting points for controller software?