Erik,
You are making progress. The club is going a little outside in the takeaway and coming into the ball from the outside and steep.
Set-up: Your upper body is spot on!!!! Knees are still bent a little too much and balance is in the knees. To feel the difference between knees and hips, stand tall in balance (ear hole over shoulders, hips, knees and ankles - all lined up). Next, lift your toes off the ground. You will feel a shifiting of your balance and weight into the back of your body and the balance will be in the hips. To feel the diffenrence, do the opposite by lifting your heels off the groud and slightly flex your knees. This is balance in your knee joints. You should now be able to differentiate the two.
Once you are in your hips, bend over with your knees still straight until your upper body is a little more over the ball and you almost fall over on your heels. Then close your eyes, slightly bend your knees until you feel centered in your feet. Your arms then will also fall closer to your chest wall, where you want hem to be (check out iger's set up to see this.) This will now be your posture. Looking in a mirror, your tailbone will look higher and more in a tilt from your hips, not your knees as you are in this video.
Basically, from where you are in the video, the simplest way to get perfect posture is to starighten your knees up and the club will come off the ground. Next, bend over more from the hips to get the club on the ground and then slightly flex the knees, centering your weight.
Takeaway: Since your knees are still too bent and the spine angle a little too tall, you look stiff in the takeaway by having to use your arms to initiate the swing. With that, your left knees is bending forward towards the ball instead of towards the right knee. Even from behind it still looks like there is a little reverse weight distribution causing the outside move down from the top of the swing.
Once you get more bent over the ball and taller you will sense your upper arms (Triceps) closer to your chest wall. From there, let your body rotate the club slightly inside your target line, keeping your upper arms close to your chest. You will feel more weight on your right hip, which is good! And once you are there, your downswing will be much better because you can then have the club down more from the inside!
Erik, you have made great progress on your set-up. It is not easy. There was a player on TOUR that knew his posture was off in January of 2007. In August, he said he finally felt it being correct at the Bridgestone and played well the next week at the PGA Championship in Tulsa. Yep, his name is Tiger Woods. So be patient. The better it gets, the better your ball striking becomes. As it moves to your perfect posture, then you will have so much control of your ball.
Keep up the good work. Something tells me we will see you playing stateside sooner than you think!