The minhag Chabad by netilas yadayim in the morning is to raise the hands until the peyos for the brocho al netilas yadayim. The source for the minhag is in Likutei Diburim of the previous Lubavitcher Rebbe, the Rebbe Rayatz Ztz”l. There the procedure of the Rebbe Rashab is detailed: In the morning he would lift his hands until his peyos (each at either side of the head) after drying his hands and then say the brocho. By netilas yadayim for a seudah he would say the brocho while rubbing his hands together at the level of the heart and then dry his hands. This became the minhag of all Chabad.
Does anyone have any sources that might shed some light as to why he was noheg to lift his hands by the peyos in the morning and by the heart for a seudah? Do any others have a similar minhag? Shkoyech in advance.
נט”י שחרית – שו”ע אדה”ז מהדו”ק ד, ז. לקו”ד ח”ג ע’ 896. ספר המנהגים – חב”ד ע’ 2.
נט”י לסעודה – שו”ע אדה”ז קנח, טז. סדר נט”י לסעודה ס”ד. לקו”ד ח”ג ע’ 896. היום יום כ שבט.