I'm under the impression that it's the little hat straps and the jacket bones that are causing it, since I've done the most bone editing to them.
Here's what he looks like.
And here's how distorted they are, and they all seem to stretch out until they reach a single point somewhere off the map.
Here's what's telling me that they're most likely coming from the jacket, it's the only visible source I could find, the rest are all coming from inside of him.
I had this same problem last year when I releaed my Lord Crump vertex hack, but I can't remember for the life of me how I fixed it.
