Here's how the mesh looks like in MilkShape:

Here's how the keyframe looks like:

Here's how it looks in my game:

Does anybody know why the hand vertices aren't getting transformed by the rotation matrices?

Relevant source code:

https://github.com/polyf/battlecomp/blob/master/common/draw/ms3d.cpp

https://github.com/polyf/battlecomp/blob/master/common/draw/ms3d.h

https://github.com/polyf/battlecomp/blob/master/common/math/matrix.cpp

https://github.com/polyf/battlecomp/blob/master/common/math/matrix.h

https://github.com/polyf/battlecomp/blob/master/common/math/vec3f.cpp

https://github.com/polyf/battlecomp/blob/master/common/math/vec3f.h

[edit]

I figured it out. Since the hand bones didn't have any keyframes, I was setting the absolute mesh matrix instead of using the parent matrix multiplied by the relative hand matrix.