Tin hat on
I wear one made of aluminum foil...

Code:
IF (GPIO.3=1) AND (GPIO.4=1) THEN
Because of this both bits in question are "1" when not pressed. So they will invert to "0".
If the thing was not sleeping that is.

But wait...
Code:
DAT_OUT = %10101001
They are "0"...

What if one of the buttons are pressed?

In the end, all eight bits of DAT_OUT are sent.

Yes, I am being a cryptic smart _ _ _.