Every character I have made now stands in an odd position with their chest out and arms back. Not quite sure when it started but its quite annoying and I would appreciate any help.

I'll ask the obvious....are you using any mods? Some body mods do that.

I've tried disabling mods, no luck, going to try uninstalling mods.

It would most likely be a mod that add animations, that can be found in Data\Meshes\Characters\_male folder (even for female animations) and have .kf extension. Look for files with "Idle" in their name, and the possible "idleanims" subfolder.

Body mods typically use meshes/nifs and stuff...you have to delete those from the directories so they don't over-ride the defaults.
If you installed from disc, where I think all the default textures/meshes may be visible upon install (vs. Steam DL where they're not/packed in bsa's only) and you over-wrote the defaults (without backing them up first) you might have a problem.

Edit: and what Tojka said.

Problem solved, thanks.