bloody bones  

I remember hearing about a golden arm. But don't remember the details. I do remember hearing abunch of scary stories as a kid. But the only one I can remember is the headless horsemen.

Seems to be an Irish legend for the most part...here is what I dug up on wikipedia (by the way, the creature is also known as Rawhead and was the inspiration for the Clive Barker (one of my fave authors)story and movie Rawhead Rex),..

He is said to live near places of water (in older tellings) and under sink pipes (in newer tellings). Rawhead and Bloodybones rewards very good children, but will punish naughty children by dragging them down the drainpipes or into the water and drowning them. In addition to drowning naughty children, he is said to be able to turn them into objects such as pieces of trash or spots of jam, which are inadvertently cleaned-up and thrown out by unwitting parents

It sounds femular, i can't say weather or i have tho.

I've heard so many spooky simular stories like this that i forget the rest but thinking about it reminds me of one i heard about a small boy. (like jack and the beanstalk)

Sorry i'm not much help.
Have you tried googling it?

Kudos!
~Joey

P.s goodluck finding it out =)

No sorry when I was young my parents never read to me any story, so I cannot comment on this particular story, or any story that scared me when I was growing up, so maybe I was lucky that I never heard anything that would scare me, and I never read any scarey story to my children and maybe this is the reason why.