Chiudinelli put up a brave fight before losing the final set on a tie-break. If he had gone through, Switzerland would have had a record six players in the tournament.
Arnold will now face another Swiss, George Bastl, in the first round of the tournament.
After rain played havoc with Monday's order of play - when only one qualifying match was completed - the organisers had to reshuffle games in the hope of getting some of the big matches underway.
While a dry spell on Tuesday allowed for the completion of the qualifying round, there were results in only two first round matches. Eighth-seeded Mariano Puerta of Argentina became the first player to reach the second round when he beat France's Arnaud di Pasquale in two sets, 6-3, 6-4.
The other match saw Felix Mantilla, the winner in Gstaad three years ago, ease past fellow Spaniard Fernando Vicente, 6-1, 6-4.
Organisers have crammed 14 singles matches and eight doubles on to the four courts for Wednesday.
Switzerland's Roger Federer will meet the tournament's number one seed, Alex Corretja, and another Swiss player, Ivo Heuberger, who took a wildcard entry into the tournament, comes up against France's Sébastien Grosjean.
At least one Swiss player is guaranteed to drop out in the first round. Geneva's Marc Rosset faces the young Bernese talent, Michel Kratochvil, Switzerland's other wild card.
A good run by a Swiss player could give a late boost to a tournament that has so far been plagued by bad weather and from the late withdrawal of the original two top seeds. Cédric Pioline (ATP 9) is suffering with bronchitis, while Marat Safin (ATP 9) has pulled out with an injured elbow.
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