The first thing that came to mind, especially since you confirmed it regarding the "bone" placement, was Psionic3d's dog. Since I deleted it because of the problem it had (being buried to it's shoulders) I had to find it again; which I did.
After adding in RAISEFACTOR and first setting it to 100 I did find that it works. The dog was way up in the air at that setting. A setting of 25 gets him close enough to the ground without tweaking it.
Following is FPE code up to where I added the parameter:
;header
desc = Dog
;ai
aiinit = appear1.fpi
aimain = peoplecoward.fpi
aidestroy = destroyfadecorpse.fpi
aishoot =
soundset =
;spawn
spawnmax = 0
spawndelay = 0
spawnqty = 0
;orientation
model = dog.X
offx = 0
offy = 0
offz = 0
rotx = 0
roty = 0
rotz = 0
scale = 100
fixnewy = 180
RAISEFACTOR = 25
If it works on the dog then it is working very well.
BTW, I used your (xplosys) dog script and bark.