Do you know whether MTH eventually changed to a shorter arm, for example, on later production of the same loco? If not, you're talking about something custom that requires original engineering. You'll need help from a creative MTH tech who has a good working knowledge of various locos, to recommend an arm that will work.
Your other option is to replace the whole drive block, perhaps with one from an F-unit. (Obviously the pilots are different; not sure if the drive block and pickups are the same.)
Your best bet might be to bring the loco to a large train show like York, and compare to other MTH locos that are out of the box and on the tables. Once you spy a setup that will work, you can make note of the loco number, and order the correct part.