I have now looked at a few copies of this photograph and am now 100% convinced. It's a man walking uphill with his back to the camera.
His right leg is raised to climb up the slope in front of him and foreshortened, giving the impression of an oddly short leg. His left leg is partly obscured by vegetation, again giving the impression of a short leg. The torso proportions are quite normal when this is understood.
The large 'hand' seen on the right arm is just a bag. You can see it's a bag because it suddenly gets much thinner at the 'wrist" point. One explanation might be that ETs have oddly skinny wrists; the other is that the 'wrist' is just the point where he's clutching the handles of the bag, which is probably just a supermarket plastic bag or similar. The left arm is held a bit forward and may actually be steadying him on something, or just maintaining balance.
Now, the bulbous 'head' is a bit harder to work out but the effect of it seems to be defined by two highlights on top. Looking at these more closely it is only the right hand one that has the same sort of colour as the highlights defining the right arm and shoulder, and caused by the very low sunlight you can make out in the full picture coming from the right. This suggests to me that the left 'highlight' may not be part of the figure at all - it's something behind him, or as I mentioned it might even be a cloud of breath. The effect of a 'face' looking to the left, or of an ET looking straight ahead, is just clutter.
With this in mind the head becomes clearer - the person has the hood of their coat up, and they are looking ahead and slightly to the right, as you'd expect when looking at the direction the path in front of them is going. The right 'highlight' is on the side and top of the coat's hood.
Now, how does this square with the witnesses story? As I see it there are three options
- It was all a conscious hoax based on a chance photograph
- He later noticed the figure in the photograph, believed he'd caught an alien on camera and built an elaborate fantasy around it, possibly fuelled by a dream or two
- He did see the other bloke at the time, but misperceived it as an 'odd' figure and the photo he took seemed to back it up. I note the witness claimed that the figure gestured at him to stay away before running off. Well, you would, wouldn't you, if some strange person was pointing a camera at you in that situation? For that matter the bloke could have just come back from committing a burglary or something, with a bag containing stolen property, and was taking what he thought was a secluded short cut across the moor. You can easily imagine how it would play out.