I realize that my experience has made me overly paranoid. My dog borders on the medium-large size and I think she looks taller when she is sitting up than she does when she is standing. If you have a smaller dog...like a cocker spaniel, they might not have such a hard time judging size.
If you want to make sure the cargo people are comfortable with the size, perhaps a couple of days before you fly, you might want to go by there first with your dog and kennel, have them check it out for you. It could save you a lot of stress and money!
They have good reason for being cautious. If the Animal Control people at Heathrow (or wherever you are landing) feel that the kennel is too small, the airline gets fined a huge amount of money...like $10,000. And they get only 3 chances (I think that is the number) and after that, they are not licensed to fly animals on that route again!