I'd say study the working of the actaul Kre-o's first, Decide if you want it transformable or not. If 'YES' Try to make an actaul Kre-o Transformable using as few extra parts as possible Study Crankcase's Designs (including concepts) to get reference. Start Desiging. (Recommend trying different styles to see what works for you) That's how I'd do it, yes it requires alot of planning but you can't just rush into things like that and expect perfect results strait away. Hope I helped (BTW I stopped using LDD because I found it too unstable, could you tell me if it's improved over time?)
I wasn't going to make him transformable in the conventional sense. I'll have to go digging for art and screens, but I think I can do it. And LDD is much better.