I do believe that SMD supports the influence of maximum 3 bones per vertex. Could this be the issue here?

Neither DMX nor SMD animation files support bone scaling. They only support translation (positional movement) and rotation. So if you've scaled bones in the animation, that won't affect the exported DMX/SMD animation file.

If you haven't used bone scaling, which I actually don't think that you have, it's possible that there might be some armature settings or modifiers that DMX/SMD format animations don't support properly/at all, causing inconsistencies with the exported product.
In this case, you may need to share the original Blender session (or another session with the same issue) for people to get a better look on it. (I'm not saying that I'll be able to help, but seeing the Blender session might be beneficial for other people.)

Originally posted by Momo:

I do believe that SMD supports the influence of maximum 3 bones per vertex. Could this be the issue here?

I don't think so. The SMD format itself theoretically supports an infinite amount of bones affecting a single vertice (although StudioMDL (the model compiler) will, from what I've heard, automatically "cull" this down to the 3 most "effective" bones when compiling the model), and both of the animation examples are within Blender while the Blender Source Tools keeps all bone weights intact when exporting mesh files.

Dropbox link to .Blend File[www.dropbox.com]
If anyone minds taking a look at it and finding out why it exports to .smd so oddly, i'd really appreciate it <3

EDIT: I have not used any bone scaling at all

Originally posted by Deo3560:

-Link- -

I don't know if this is important or not, but in the Blender session, you have vertex groups on the mesh called stuff like "Right Arm", "Right Arm", and "Right Arm.001", while the armature only has bones called stuff like "Right Arm".

This means that there are some vertex groups on the mesh for bones not present on the armature, and a few vertex groups even somehow have the same name as each other.

(So, I'm guessing that this is important, and probably related to the issues that you're having.)

Unfortunately Removing the duplicate Right Arm and Left Arm, and the Extra Right Arm.001 and Left Arm.001 did not change the animation at all, I was really hoping it was going to be that simple of a fix.

EDIT: It has to do something with the SMD format, I exported to .dmx and the animation works fine, unfortunately I can't use .dmx, and I really need .smd

EDIT2: I exported to dmx and exported the dmx to smd and it worked o.O so problem solved?

Originally posted by Deo3560:

- unfortunately I can't use .dmx, and I really need .smd -

Out of curiousity, is there a specific reason that you can't use DMX for this?

DMX is, more or less, (near?-)objectively superiour to SMD in many ways, with the only "advantage" that SMD has (amount of bone links per vertice on a file that StudioMDL accepts) being a sidegrade rather than an upgrade (and also rendered invalid once the model is compiled using StudioMDL, anyway, as it apparently culls it down to 3 bone links per vertice if you use SMD (while simply not accepting 4+ if you use DMX)).

(If you want to use VTA flexes for the model, you can do that just as easily with DMX as you can with SMD, though in that case, it'd be better/safer to embed the flexes within the DMX than using VTA flexes. And if you want to use VTA "vertex animation", then as I said before, you can use VTA files for DMX meshes if you want to.)

The game the model goes into strictly uses SMD unfortunately, I can't even use VTA on the animations either. It's a very limited enviroment that as the animiator have very little control over. But I appreciate your help very much.

Which game is the model for?

Originally posted by Deo3560:

The game the model goes into strictly uses SMD unfortunately, -

If it's GoldSrc, I think that it only allows 1 bone per vertice when compiled, ignoring the "multiple bone influence" stuff that Source supports, so your model won't animate quite right in-game in that case. If it's Source (or Source 2), then, as Momo asked, which specific game? Most Source games should support DMX mesh files for model compiling. (I know that it isn't necessarily GoldSrc, Source, nor Source 2, but beyond those 3 engines, I have no idea at all.)