The AT-AT foot (not the toes or the half-circle arc piece) is made of a smaller drum stacked on top of a larger drum. On the ILM models, the drums are two separate pieces, with the smaller top drum compressing into the lower drum with each step -- like a shock absorber. The old AMT AT-AT model molded the two drums as one piece, and every model since then has gotten this detail wrong. The Cross section book even gets it wrong. But watch the movie, especially when the walker stomps on Luke's snowspeeder. The two drums clearly compress.
Oh yeah how cool is that, thank you for explaining that so well :thumbsup Hopefully Bandai will get it right on the 1/48. Good luck with modifying your 1/144 :cool