Here’s a vid of a muscle test. I used the Maintain Volume bone constraint to flex the muscle. Create a separate vertex group for each muscle. In Weight Painting mode, paint the area of the muscle to be deformed. When the bone is scaled, the muscle flexes. You can use IPO drivers to link the scaling of the muscle bone to the rotation of the leg bones.
T-rex model is by Cyberchinchilla and is available at Turbosquid. I had to rework the leg. Fortunately he provided a low-res version that was easy to edit.