Coming off from the previous crane truck, I sought to improve its functionality and I have made some improvements:

In version 2 and 3:
(+)the crane boom is able to stand by itself due to the addition of a motor
(+)there are two sets of wheels that steer
(+)crane structure is able to rotate somewhat freely
(+)realistic design compared to the first truck
(-) still no feasible way to have a multi-part boom or real structural pneumatic/hydraulic support

Version 2 only:
(+)a total of 4 sets of wheels, giving it 8 total
(+)motorised steering (albeit a lot of friction)
(-) a disproportionate length and unnecessarily heavy; crane structure is not exactly "centered" on the truck bed, and the truck's center of gravity is closer to the vehicle's rear

Version 3 only (INSTRUCTIONS NOW AVAILABLE http://www.instructables.com/id/KNEX-Mobile-Crane-Truck-v3-Instructions/):
(+)looks more akin to a real mobile crane in terms of proportions and center of gravity.
(+)a total of 3 sets of wheels--front and rear set are on a coordinated steering
(+)the ability to implement outriggers was definitely a plus.
(-)the boom was less able to lift itself and still needed some help; the cause was from the gears not catching and thus slipping.

Due to the amount of hours I work during the week, I will need to set aside an entire weekend to post instructions. Thank you for being patient and stay tuned!

As for the project itself, creating a fully functional mobile crane in the form of K'NEX is becoming extremely difficult and approaching impossibility. The most difficult part of this idea is coming up with a) a method for building a rising boom that is not only able to stay up, and can also lift a mass, but one that is not very heavy, or b) having enough power with the small motors to raise a strong boom and lift a mass. In this model, I have opted for option (a) due to the constraint of the vehicle size. Option (b) would force the model to be disproportionate to its wheels, since crane booms in real life are about 1/4 the width of the vehicle width.

Comments and feedback are much appreciated! I am anticipating a version 4 as soon as the epiphany train arrives.

Credits go to the following for ideas:
http://www.instructables.com/id/Knex-Supercar-Instructions/ the K'NEX Supercar for structural support
http://www.jenniferclarkbass.com/lego/demag_crane.htm this website containing scale LEGO mobile crane truck models for the inspiration and idea.