It seems like the arduino's PWM is incapable of producing negative voltage values, is this true? The system is completely unstable and oscillates between 0 and 5 volts.
A PWM output signal ( as used in analogWrite() ) does not output a true analog signal, but rather a digital on/off switching signal where the ratio or on time Vs off time is the variable amount. If one requires a true analog output voltage derived from the PWM output signal the output must be wired to a low pass filter which can be a simple series resistor and capacitor to ground and the analog voltage taken from the junction of the resistor and cap. You will then end up with a true analog voltage that can range from 0 volts to +5vdc corresponding to analogWrite(pin, 0) to analogWrite(pin,255).
Lefty