The current setup I seem to be having some luck with is Axis Angle and locking the W,X,Z axis, parented to wrist (with inherit rotation turned off) with a copy rot on all axis (with invert turned on for X and Y) plus offset and influence of .5 and space set to local local, and damped track constraint on y axis to an empty…
Hows this, twist bone parented to hand with IK chain setup to forearm bone. Copy rotation getting local Y value from hand at 0.5 and hand and twist bone set to Euler YXZ to evaluate Y first https://dl.dropboxusercontent.com/u/1693140/Arm_multi_bone.blend (Initial rig/model is not mine, found it on blend swap or a forum…