Alan Arkin was terrible in this movie.

TOTALLY agree.

Well, I've got news for you pal, you ain't leadin' but two things: Jack and sh*t and Jack left town

He is without question the worst part of this movie. I usually really like him, but everything he does in this is embarassing. When I first saw this movie I didn't even think he was an actor. I thought he was Tim Allen's dad or something, and only got the part for some reason like that.

He was sleepwalking. He never fully recovered from Sandman's spell.

That part where he realizes he's at the North Pole and that Scott is Santa Claus is some of the most painful shit I've ever watched.

Alan Arkin was always one of those actors that simply improved anything he was in. I also was wondering what the hell happened while watching TSC3. My best guess is the man was recovering from a stroke or mental breakdown and was given the role because he's just one of those guys that everyone in the trade loves. The only saving grace is that the role wasn't important to the film.