I had a feeling it was like that, when i saw it extended in one pic, and short in another..
BTW: Since this driver is an AMC it should be putting out 350mA through your LD, unless it has a bypass resistor across the output..
It should also be capable of working down to 3.3V, so you'll get almost everything out of your batteries..
You can also use AAA Ni-MHs with it. They are more than capable of putting out 350mA, and you could make it smaller.