OK, this was done really fast so it's not perfect.
The first thing I did was to isolate the two sections of the sleeve and place them on their own separate layers.
I then used Free Transform to size the digital camo to scale and duplicated the scaled version several times.
For the forearm I then used Puppet warp to bend one of the duped camo layers around the natural curves of the arm.
(note: I lowered the camo layers opacity so I could see through it)
I then clipped this layer to the forearm layer and restored the opacity back to 100%.
I repeated the process for the Bicep area.
Combined. Already it looks better.
Then I added a new layer on top for the shading.
By Cmd/Cntrl + clicking the layer mask of the forearm, I created this selection.
Highlighting the Shading layer, I then used the Brush Tool to add in shading.
By Cmd/Cntrl + clicking the layer mask of the Bicep, I created this selection.
Highlighting the Shading layer, I then used the Brush Tool to add in shading.
And here's a much more believable starting point for the tear effect.
These sleeves look more real than just pasted on.