I actually did this last summer, but never got around to uploading it here. I made the avatar in blender, using cycles to bake the textures. I didn't make the hair and hands, however. Both the head, tail, and lower legs are rigged mesh specifically made to fit the standard sizing small shape.

As for any updates for the avatars I sell... I tried seeing if I could make the parts in fitted mesh, so they could fit a larger size range. Problem is that it didn't quite work and there was gaps between the meshes and the SL avatar when the body fat slider was adjusted. Therefore, I am trying to figure how I would go around making the updated avatars to fit the SL avatar in varying sizes.