Hi blackberrybunny, welcome to NT.

At what level (which vertabrae) is the arachnoid cyst?

At first, the itching nipple made me think of the possibility of a skin fungus, but movement to the arm kind of shot that idea in the foot.

On a dermatome chart, the nipple could be T4* (or T5* for women) but there doesn't seem to be a corresponding connection with the parts of the arm you mentioned (unless I missed something, which is entirely possible).

So all else I can think of at the moment is to try goggle for things like:
pruritus nipple

pruritus causes

pruritus arachnoid cyst

I haven't heard of anything like this either (which doesn't mean a whole lot—I'm not a medical doctor), but just looking it up and writing about it is starting to make me itch!

Doc

* These designations do not correspond precisely to thoracic vertebrae designations—see dermatome and http://commons.wikimedia.org/wiki/Fi...s_(female).png