Mmm...purely from a theoretical perspective, the more mass you have the more force is transmitted to the pedals. There is a point where the torque applied to the pedals is less than the force you can generate solely by being you, which is your mass x g, or in other words, your weight. Peddling up to this point you can turn the pedals without a problem, even without your hands in the handlebars. But, if resistance increases, you will need to increase the force to the pedals. Since the acceleration of gravity is constant, the only way to turn the pedals is by increasing your mass, which you can do by pushing your handlebars up (thus causing an inverse reaction of the same magnitude, expressed as an increase of mass).
Anyways, your biceps are not in a good region of the force-length curve, or the length-tension curve. So, you push less, so you have less mass and thus less force going through the pedals, which equates to less power output.

But of course this is a theoretical exercise. In fact reading back, I got confused with my own words, but I swear it did make sense at some point in my head.