There's apparently a https://www.reddit.com/r/skyrimmods/comments/2xpun2/help_companions_quest_take_up_arms_bug_has_to_do/ with the mod "Master of Disguise" - no idea if that pertains to your situation, and no idea where to look for a solution (apparently the mod owner has gone off the grid with all his/her/its stuff). There may be conflicts with any other mods that mess around with faction identity as well.
Do you have a save from shortly before the "Take Up Arms" quest? If so, I'd try that, play through again, and see if it's still an issue.
As a last resort, you could always use the console to check whether the quest completed properly, and if not, force-advance it to completion. To check the stage, type "getstage C00" in the console. It's supposed to be at 100. If it isn't, try "setstage C00 100" and see if that works (or if it breaks your game even more...).