Transformation issues

[LRH]

Hello all.

I've been very into pixeling (is that a verb?) things lately, and as my latest challenge to myself, I thought it would be cool to animate something from an anime I really like. The transformation seen here:

http://www.youtube.com/watch?v=aX26MLlRfws
at about 21 seconds in.

(EDIT: also please note, he doesn't usually start with just his arm, normally it all happens at once...but this was the best example I could find...)

Here's my two pictures of the beginning and end of the process:
From this:



To this:


I'd just like some critiques as well as suggestions as to how to go about the transformation animation. I tried a few things but they ended up being far too complicated.