Dude, i had the exactly the same problem! And i frustrated me to hell, but the thing is this...practice, practice, practice. Thats really one of the best thing you can do, when i went trough Fundamentals 2 i also had big problems, including the arpeggiated stuff.
What i did? I went through the whole series of chords really, really, really slow in the beginning, and then you will get to a point sometime where it's like you ''crack the code''

Personally i look at my right hand when doing arpeggios. But i think you should be able to look at both.
I would also recommend that you practice a little more on changing chords with you eyes closed (I did for a time, and it helped alot) just by strumming and not by arpeggiation, like at exercise for you left hand.

Thats what i think you should do, but i haven't nearly no experience. And some of the instructors have some better idea i guess.
But the thing i told you to do here is what i did, and it worked for me. Try it out and be patient with yourself :)

Best of luck to you!