I use a socket allen and a 1/2 inch torque wrench. It sounds big, but the scale is oriented low. 40 bucks for the set. 35-45 ft-lbs is what they should be set at(as per service bulletin included with most). I know somebody will shoot me for saying this, but overtorque is less detrimental (certainly harder) than undertorque. The consequenses of undertorque have been pretty well discussed, so I won't worry with that.
The way to check if you have a screwed up square taper arm is to take it off, clean the hole real good. Now look at the square. Are there 4 faces with rounded corners? If they are still flat faces then you can probbably still get it to seat propper. If there is an indentation in the middle or just off the middle then you probbably have a new arm in your budget.