Stress-induced eczema (atopic dermatitis): The patient's attribution of the rash to stress is a common association, as stress can exacerbate or trigger eczema. The diffuse, flat nature of the rash is also consistent with eczema.

Contact dermatitis: This could be due to exposure to an allergen or irritant on the arms, leading to a flat, diffuse rash.
Psoriasis: Although typically more plaque-like, psoriasis can present with a flat, diffuse rash, especially in its early stages or in response to stress.
Seborrheic dermatitis: While more commonly found on the scalp, face, and torso, seborrheic dermatitis can occasionally present on the arms, especially in a stressed individual.

Lyme disease (erythema migrans): Although typically presenting as a singular, expanding lesion, it's crucial not to miss Lyme disease due to its potential for serious complications if untreated. The bilateral nature and attribution to stress might be misleading.
Syphilis (secondary syphilis): This can cause a diffuse, flat rash on the arms, among other areas, and is critical to diagnose due to its potential for severe long-term consequences if left untreated.

Pityriasis rosea: Characterized by a herald patch followed by a secondary eruption of oval-shaped lesions, pityriasis rosea could be considered if the rash has a distinctive morphology, although it's less likely given the description.
Viral exanthems: Various viral infections can cause rashes, but these are often accompanied by systemic symptoms such as fever, which are not mentioned in the scenario provided.