To the OP…
I have the same Leatherman you described and I routinely take it aboard with me on domestic flights packed in my carry-on. Nary a whisper from airport security. In fact, I was noting this very same situation to friends the other day. I have always assumed that the x-ray operator simply didn’t know what they were looking at (very frightening!). But think about it… a Leatherman is made entirely of metal, and it’s folded on itself several times. What sort of image would it generate on an airport x-ray scanner? Does it actually look like a knife (albeit, one shorter than the proscribed lengths mentioned here) or is it just one big hunk of metal to the x-ray operator?
On another note, I also carry a miniature Leatherman on my keychain. No mistaking that one. Never had it confiscated or even questioned. Of course the blade is 1" long at best. But they always show a keen interest in my Palm Pilot. I’ve got to pull it out and turn it on to satisfy them.
That brings up another point (I’m full of 'um today!). In a previous life I was a videographer and used to travel quite a bit with my camera. Most freelance photographers do NOT trust their cameras to the apes in bagage handling and prefer to carry them on. I would usually try to get out of passing the camera through the x-ray machine (why take chances?) and sometimes the guards would comply and agree to hand inspect. Of course, hand inspecting a video camera usually means taking it out of the carry-on bag and turning it on to let them see through the viewfinder. Fine. They know it’s a real, functioning camera and they pass me through. WRONG!
Unfortunately, I know that I could pull most of the guts out of that camera, leaving only the minimum circuits required to run the viewfinder, then fill that vast empty space with God knows what. Of course, I’ve got nothing to smuggle, so America’s skies are safe from me, but what about everyone else who’s already thought of this. How safe do you feel now?