About 3 months ago, I was in your exact same situation.
Since then I have dropped from 21% to 14% body fat, and have notice a significant difference in my deltoid, bicep, and tricep definition.
A lot of guys are afraid to drop some weight in fear of looking significantly smaller. What I have come to learn through this is that losing fat and water actually inhances your size visually. My arms dropped from 16.5 inches to a bit below 16 since I started cutting. Honestly, when looking in the mirror though, they LOOK bigger than they ever did before, simply because there is less fat obscurring the shape and proportions of the muscle. Fat makes you look smooth and uniform instead of allowing the individual muscles to look prominent.
Don't be affraid to cut fat. Yes, you will loose size..but it's size that looks like shit. A pair of cut 16 inchers will always look more asthetically pleasing and visually larger than a pair of uncut 18 inch fatties.
In order to gain arm definition, you will HAVE to loose over all bodyfat composition. Start cutting calories, do whatever cardio works for you
(I like a stepper), and use some kind of thermogenic fat burning supplement to aide results (I used a couple bottles of TwinLab's 'Ripped Fuel'). Keep protein intake HIGH to help maintain your muscle mass.
