EDIT: Case cleared for me.

Alright lets do this then
Here is the code I came up with: (not tested)
Code:

---

string arrow_str = <arrow.mdl>; //your arrow model


function arrow_event()
{
	//hit an entity?
	if(event_type == event_impact || event_type == event_entity)
	{
		if(you == player) //player = pointer to your player model
		{
			you.health -= 25; //do damage
		}
		
		my.skill1 = 1; //set my skill 1 so I get removed
	}
	
	//hit a wall?
	if(event_type == event_block)
	{
		my.skill1 = 1; //remove me
	}
}

action arrow_act
{
	my.enable_impact = on;
	my.enable_entity = on;
	my.enable_block = on;
	my.event = arrow_event;
	
	my.skill1 = 0;
	
	while(!my.skill1)
	{
		//change the 5 for making the arrow faster or slower
		//if there is a syntax error with time_step, change it into time
		c_move(my,vector(5*time_step,0,0),nullvector,ignore_passable);
		wait(1);
	}
	
	wait(1); //just to be safe
	ent_remove(me);
}

action arrow_creator
{
	my.invisible = on;
	my.passable = on;
	
	my.skill1 = 0;
	
	while(!my.skill1) //get rid of this entity by setting skill1 to 1
	{
		you = ent_create(arrow_str,my.x,arrow_act);
		you.pan = my.pan; //let the arrow face the same way
		wait(-5); //wait 5 seconds
	}
	
	wait(1);
	ent_remove(me);
}

---

Thunder