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Don't the people who make mods have access to the source character models? A website such as www.shapeways.com could print them if they were uploaded I'd imagine, fully coloured from the game textures and in whatever pose you wanted.
I have no idea if that would be legal or not 
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The people who make the AO mods only have access to the game's sprites.
Now that you mention it, there was someone who ripped some of the character models from MO. Using them would probably be breach of copyright and would definitely be grounds for suing me if I
sold the models. But for my private usage it would be a legal grey area.
Also, bugger Shapeways. I have direct access to 3d printers I can use.