Alright, I think I figured it out the solution to my problem.
I'm going to associate certain weapon types with an element, and upon character creation, you pick a weapon type. That weapon type will be what you can use as an implement, and the associated element will be the damage type.
I think this both solves the problems with damage type of the attacks and what implements to use. This also gives me some options for some new feats specifically for the arcane paladin. A feat for a new weapon type as an implement (and therefore a new damage type when you use that weapon type) or even just the ability to use a different damage type with the weapon type you have.
Now that I think about it, I have not done any new feats for the APSC project. Expect a post with feats soon... Either to make them fit in with their new power source or to adjust their current feats to fit the new power source... or something like that.
So, What do you think of my new plan? Any questions, comments, or blindingly obvious errors in my thinking? Leave a comment!