OK I know what I'm going to do. I'll have to post pics to illustrate this later.
I can turn the arm around so that the biceps and triceps are pointing in their appropriate directions - thus the elbow will appear to bend the right way. However the fact remains that this is a left arm in a right shoulder socket - the full rubber shoulder prevents the arm going down by his side as it would normally be able to do and the most that can physically be managed is for the arm to stick out at a ninety degree angle to the body - and in this way the figures armpit effectively becomes the shoulder. Unfortunately the socket and all the jointing is now exposed. However this would be moot if I have the figure fully clothed.
Thus, I will simply cut away the requisite amount of rubber at the shoulder actual in order to turn it into an armpit and allow the shoulder articulation to function normally. Its a bummer but as I said I was planning to have one of my 2 Dutch figures fully clothed anyway - this will be him.
Now if my SS Exclusive figure ends up having the same problem that'll be a different story!