I've wanted to do this since this guy came out back. I modified his propellers into 3-clawed hands.
I cut the blades off, and glued them onto a Doctor Octopus claw, I think from the Spiderman 2 movie. Each claw finger has 2 points of articulation.
They can even grab stuff.
They still closely (?) resemble his original props, which I wanted because those huge blades really lend a lot of character to the Osprey alt mode, kind of a defining characteristic.
I'm thinking of using black Sugru to smooth out the exposed part of the Doc Ock claw.
EDIT: I just stumbled across an alternate transformation for the arms that shortens them and provides a nice alien look too, IMHO. It keeps his hands from dragging on the ground.
Comments please!