Based on your exam (weakness of deltoid and biceps only, no other muscles affected), I would also doubt a C5 lesion. With a C5 lesion I'd also expect some involvement of the pec major, brachioradialis, and possibly the ECR.
This really sounds like some autoimmune partial upper plexitis or even a C5 radiculitis, especially with its getting better. I've seen this post-partum, but never pre-partum. It may be worth going all out to locate a lesion and writing up the case. Consider a thorough EMG/NCS study, high-field (3+ Tesla) MRI w/gad (the root or part of the plexus may light up), and LP. Of course someone will need to pay for it, and her insurer seems to be balking...and she IS getting better, so it will be a very hard sell.
One of the "nice things" about residency training in academic/governmental teaching hospitals is the ability to waste other people's money in the pursuit of answers to cases like this one. 😉