To me it looks like your motor is setting off at an angle which will make your blade cut like that.
As Tom Said the arm may not be your problem. The motor and blade is made to rotate also so you can turn it to make rip cuts. because of this there are also adjustments to that part also. When I had my Radial Arm Saw also a Craftsman it had a number of adjustments to be made on different parts of the saw, not just the arm.
Check with vintagemachinery.org or ereplacementparts.com for a manual.
So, what happens is this:
The blade is 90 degrees to the table.
The arm is 90 degrees too.
However, when I put the square to the blade, and I drag out the arm, it goes AWAY from the square. I guess ill have to keep playing with it until I get it squared. I just dont know where to adjust the arm movement. Ill look for the manual, maybe that will help.
THanks for the help.
First, find the manual. It should be online somewhere. There is an adjustment for every angle of the blade. I think the one for that plane of the blade is a nut under holding the motor hanger.
Find a dead on framing square. Use it for aligning every plane (geometric). For setting the saw square, I barely let one tooth touch the square, and drag it out. It's right when it makes the same sound, barely touching the square, all the way out on the arm
Once you get the blade dead on, replace that fence.
The rollers that the motor rolls on the arms from should have eccentric centers. You can keep playing with their positions until you get all the play out of it.
Once you get everything adjusted, don't ever let the blade lock up in any piece of wood. It will throw something off.
I adjusted my 1973 Craftsman 12", that I bought new, dead on in every plane, maybe twenty years ago, and I still use it for precision 90 degree cuts. I even cut finished tenon shoulders with it.
Sorry, but I know nothing about that particular model.