Test 1 - 0% Melee Reduction / 763 Arcane Resist / 7448 Armor
http://imageshack.us/a/img707/6030/nomeleegear.jpg - gear
Test 2- 44.74% Melee Damage Reduction / 658 Arcane Resist / 7208 Armor
http://imageshack.us/a/img59/496/meleereducegear.jpg - gear
What I have found is that the 'Reduce damage from melee attacks' modifier does in fact reduce the damage of Arcane Sentry's. Without any melee reduction, all of the arcane sentry tick's were over 2k damage. The melee reduction gear setup (having 100 less resist and 240 less armor), Arcane Sentry's were ticking on average around 1270 damage.
note: I did post this in the General Discussion forum as well but I feel this information may prove to be useful for those of us gearing for D/C resistance in hardcore.
For resource purposes, the following link is someone else's testing to determine what type's of damage are considered to be 'melee' or not: