To prevent collapsing on the forearm and for good wrist deformation you need two extra joints between the elbow and the wrist.
1.To make these joints duplicate (ctrl+d) the elbow joint twice and delete all child joints.
2. Name these joints armtwist0_L and armtwist1_L and place them along the elbow bone.
3. Parent them (p) to the elbow bone.
4. Select wrist_L and armtwist1_L constrain>orient (only constrain the x axis)
This will cause armtwist1 to rotate in X when the wrist is rotated in X.
5. Next, select armtwist1_L , elbow_L , and armtwist0_L constrain>orient (only constrain the x axis)
6.Now set the weights on the new orient constraint to 0.5.
7. Select the skin and the two new bones and click Skin>edit smooth skin>add influence
8. Paint weights for the two new bones on the arm.
DONE!!! Now you have a forearm that won't collapse when you twist it, and a wrist that will deform correctly as well.