Wait a minute! Was this before or after He told Moses not to make any graven image, or any likeness of any thing that is in heaven above, or that is in the earth beneath, or that is in the water under the earth?

After. To quote the First Commandment: "You shall not make for yourself an idol in the form of anything in heaven above or on the earth beneath or in the waters below. You shall not bow down to them or worship them..."
(My emphasis)

I think the point lies not in whether or not you make a representational sort of object, but in whether or not you worship said object. The Israelites clearly broke the commandment when, long after Moses made the snake, they began to reverence it as an idol/deity.

That said, the commandment does seem to imply that representational art is forbidden. I guess Moses was allowed to make the snake because he got special permission from God. But I'm certainly no theologian.