No, I'm pretty sure they are cousins. Elrond and Elros were brothers (duh), which would make their kids, Arwen and Vardamir, cousins. That would make Vardamir's kid (Tar-Amandil) 1st cousin once removed to Arwen. So then you take that down many generations and you get 1st cousin many times removed.
My way to prove this is the "Took of Great Smials" Hobbit family tree in the Appendices. Frodo and Bilbo are 1st cousins once removed. If you replace Elrond with Belladonna, Arwen with Bilbo, Elros with Mirabella, Vardamir with Primula, and Tar-Amandil with Frodo, you have exactly the same scenario.
I have way too much time on my hands to figure this out.
