Hm… well I won’t be able to test this fully until I get home much later today, but I had a quick look-over your file, and one thing which sticks out to me is that if I move the mesh, it doesn’t warp when moved away from the armature as mine does. Maybe it needs to be parented to it? I’ll check more when I get home.
Just an aside, but how did you go about showing the names of your bones? I’m still using SkinnedSample, but I couldn’t find where, if at all, the names of bones were stored.
Edit: Also, if you want a potential (not the best, and might not work) fix, maybe try setting the scale of your mesh to half before applying the bone transforms to it?