Only my own opinion, but I think it's a little of each. Simply sitting down changes it some (maybe for the worse), but it's usually accompanied by sitting on the edge of something, with the legs splayed outward and leaning back slightly while pushing the dick downward. It does something to that gap where your dick meets the pubic mound, and it kind of opens up and expands so the ruler can sit further back. If you simply "sat" with your body at a 90° angle, your crotch would actually likely pull inward making it hard to get the full length. I'm not even sure how you would get your dick to the appropriate perpendicular point to see how far it sticks out from your body with your legs in the way.
It's still getting you a false reading, as the outer side of the curve will stretch the skin and all, while the inner part contracts. The reading you got would only be valid for that very topmost layer of skin, and get shorter and shorter as you headed in toward the center or bottom side, so the only true length would be an average of all those numbers which is the same thing you'd get (theoretically) when it was straightened out.
Take Care
