Duplicator's series, how it's made?

Hello!
Sometimes i have little problems with modeling, but always i can fix it. This time i can’t .
I think many peoples know “Duplicator’s series” from swedish studio “Meindbender” .
I like how this little “red-orange” guys open mouth. It look’s funny .The animation I thinks is just blending between shape’s. But how model this second shape? (when mouth open)
On Vimeo is a little making off ,of rigging, and on this video we can see wire . It look’s not so complicated, but i can’t model this second shape ,so maybe You have some tips ,how to do it?
Below link to this making off ,and link to OBJ file with my model.

Making off
http://vimeo.com/9519180

File:
http://www.speedyshare.com/files/219…einbender2.zip

P.S Sry for my english i know it’s horrible.