I second that this sounds like a rotator cuff injury. I've had a similar injury to this recently (also characterized by that pain you feel, when lifting parralel to shoulder level, arm stretched in front).
You may also notice that when doing bench press, the pain really seems to kick in, when you bring the bar down low to your chest.
Google around to confirm more shared symptoms of this problem, but I suspect you will reaffirm that it is indeed your rotator cuff.
The gent above me, from my knowledge/experience, just gave really good advice - right on the ball, esp about what a doctor would tell you / how to approach your injury.
My cuff injury was REALLY REALLY bad (volleyball). I was in excruciating pain - It would wake me out of my sleep and have me yelling.
But I've slowly, nursed this arm back to health. I could write a book
Your first aim, is to get rid of whatever swelling/inflammation is there. Thats one of the primary causes of pain. Lay off ANY excercise with weights, that cause pain. Your rehabilitation, CANNOT take place with swelling.
Icing works well, but what works even BETTER, is whats called the Hot and Cold method (read up about that).
After you've reduced the swelling as best as you can, you need to do the strengthening excercises that you were told to look for above. I'll come and post any links that I find, but for the sake of example,one such exercise involves just raising your arm out in front of you (right about to that position that you say hurts you).
Also - stretching it to the side in much the same manner, and above head level.
Do a couple reps of these, (the aim is to strengthen ALL the muscles involved in these motions,)
then REST IT the next day or 2. When you can do these with very very very little pain, or NO pain, you can move unto doing those same exercises with light weights. If you can already do this with no pain, move unto using the light weights.
These exercises really strengthen the network of small muscles that make up the rotator cuff. There is ONE exercise in particular that is great for this injury, but I cant remember its name! - and it would be a bug to describe, so, I'll find out its name from a friend, and let you know.
-All the best.