  The observed abundance of giant arcs produced by galaxy cluster lenses and
the measured Einstein radii have presented a source of tension for LCDM.
Previous cosmological tests for high-redshift clusters (z>0.5) have suffered
from small number statistics in the simulated sample and the implementation of
baryonic physics is likely to affect the outcome. We analyse zoomed-in
simulations of a fairly large sample of cluster-sized objects, with Mvir >
3x10^14 Msun/h, identified at z=0.25 and z=0.5, for a concordance LCDM
cosmology. We start with dark matter only simulations, and then add gas
hydrodynamics, with different treatments of baryonic processes: non-radiative
cooling, radiative cooling with star formation and galactic winds powered by
supernova explosions, and finally including the effect of AGN feedback. We find
that the addition of gas in non-radiative simulations does not change the
strong lensing predictions significantly, but gas cooling and star formation
together significantly increase the number of expected giant arcs and the
Einstein radii, particularly for lower redshift clusters and lower source
redshifts. Further inclusion of AGN feedback reduces the predicted strong
lensing efficiencies such that the lensing probability distributions becomes
closer to those obtained for simulations including only dark matter. Our
results indicate that the inclusion of baryonic physics in simulations will not
solve the arc-statistics problem at low redshifts, when the physical processes
included provide a realistic description of cooling in the central regions of
galaxy clusters. [Abridged]
