Is this a possibility...

I'm trying to reskin the Arthas (Wielding Frostmourne) model and make it where he is totally invisible, but the sword is there, floating around (it sounds stupid and stuff, but it's for a really unique ability in my campaign). Just wondering if I can do this with skinning, or if I have to mess around with the .mdx file.

You would have to do some model editting to get rid of team color. Once you have gotten rid of the team color just alpha out everything.