The Deformed Arm is the 348th chapter of the InuYashamanga.
Synopsis
Goryōmaru's deformed arm unleashes killing-light and destroys the demons who were attacking them. Goryōmaru lets Inuyasha & friends stay the night in the temple.
Kagura slays the remaining demons outside and revives them with her dance of the dead in the hopes of finding The Infant inside the temple.
Summary
As the demons are attacking, Goryōmaru reveals what his deformed arm can do: just like the Goryō urns, his deformed arm can fire killing-light, light that is also full of demons. Goryōmaru slays the demons, reducing them to clusters of flesh. Kagura, who is watching from afar, is stunned by how quickly all the demons were slain, wondering "Who is that guy?"
Although Goryōmaru killed quite a few, the sky is still full of demons; there's no end to them. Inuyasha draws his Tessaiga and uses the windscar to slay the remaining beasts. Kagura is also shocked to learn that Inuyasha is down there with the mysterious stranger. She decides to retreat for now, flying off in her feather.
After seeing Inuyasha slay the demons with ease, Goryōmaru asks the hanyō why he kills demons when he himself is a demon. Inuyasha responds "Huh? That's what I'm asking you!" Miroku is confused, so to clarify, he asks Goryōmaru if he is a demon or not. Goryōmaru responds that while his deformed arm did belong to a demon at one point, it is now completely under his control. He claims that when a demon tried to possess him, he used his priestly powers to bind it to himself, so now it serves him. He says that the arm works well for exterminating demons. Inuyasha then asks Goryōmaru if he ordered the acolytes to murder Gakusanjin. Miroku explains that he was a demon mountain who was not violent or dangerous, and that all he desired was to go back sleep by getting the nulling stone that was stolen by Naraku. Goryōmaru asks the acolytes if they did indeed kill the demon mountain, and they admit it, but still feel as though it was justified since Gakusanjin was a demon. Kagome feels uneasy. "Then it wasn't Naraku at all? It was just an awful coincidence..."
More demons appear outside the walls of the temple. Goryōmaru says they are only keeping watch, and will surely tear them apart if they try to leave. He tells the group that they are allowed to stay on the grounds for the night. He then walks away back to his quarters, even though Inuyasha is protesting that they aren't done talking yet. Kagome is surprised, because she figured he would have asked them to leave. Shippō wonders if he is actually a decent man. Miroku doesn't know, saying that when he mentioned Naraku and Gakusanjin, Goryōmaru's expression was impossible to read.
The acolytes bring the group some food to eat. Inuyasha asks one of them where Goryōmaru is, and they explain that he's filling the Goryō urns with light. They come out of his body through the deformed arm and into the urns for the acolytes to use, but it makes him very tired. Kagome asks another child why they are here, and where their parents are. The children explain that they're all orphans whose parents were eaten by demons. "If lord Goryōmaru hadn't found us, we'd be dead too." The children say this is why they help him, so they can punish the demons who killed their parents. Inuyasha, just like Kagome, is hesitant to say this place is completed unconnected with Naraku.
Kagura surveys outside the temple. She also senses an incredibly evil aura emanating from within its walls. She also notices that there are deformed Buddhist statues lined around the perimeter of the temple, but they are odd looking, and she deduces that they probably have no effect of warding off demons, but for some reason the horde of demons from early is not attacking, it's almost like they are waiting for something. Kagura still fervently believes that The Infant, and thus Naraku's heart, is somewhere nearby. Using her Dance of Blades, Kagura kills the horde of demons, declaring: "You're going to be my soldiers!"
Inuyasha and group are still eating with the orphans, when they sense a demonic presence approaching. The children are frightened because they still don't have their Goryō urns. Inuyasha draws his Tessaiga and tells them to stand back. When he goes outside, he encounters a horde of demon zombies. Though he doesn't know it, they're servants of Kagura's dance of the dead.