That snake probably is orochimaru's kusanagi sword. The legend says that when Yamata no Orochi was defeated, the sword of kusanagi was found in its remains.
From Wikipedia: Yamata no Orochi
Susa-no-Ō asks for Kushi-inada-hime's hand in marriage, and then transforms her into a comb (kushi) which he places in his hair. He then asks her parents to brew some sake that has been refined eight times, and then build a round enclosure with eight gates, each with a platform and a sake vat. They fill the sake vats and wait, and sure enough the Orochi appears. It dips a head into each vat, and is soon intoxicated, allowing Susa-no-Ō to cut it into pieces. When he cuts the middle tail, his sword is chipped, and there he finds the legendary sword, Kusanagi-no-Tsurugi.
From youkaimura.org: Orochi
Susano-Oh, in some versions of the story, turned Kushinada into a comb and put her in his hair. He then put out eight barrels of sake which the dragon drank with relish, making it clumsier and less quick. Susano-Oh and Orochi engaged in a truly world-shaking battle which ended in Orochi's heads being cut off and Susano-Oh finding the enchanted blade Kusanagi in one of its two tails. In some versions Kusanagi is called Kusanagi-no-Tsunegi, which basically means 'The Grass-Cutting Sword', and this sword was given to Amaterasu, Susano-Oh's sister, who is the Japanese Goddess of the Sun. She then gave it to her descendant on Earth, the Emperor; from that point on it is said that it has been kept as one of the Three Sacred Treasures of Yamato.
From Wikipedia: Three Sacred Treasures
The Imperial Regalia of Japan (三種の神器, Sanshu no Jingi?), also known as the Three Sacred Treasures, consist of the sword, Kusanagi (草薙劍), the jewel or necklace of jewels, Yasakani no magatama (八尺瓊曲玉), and the mirror Yata no kagami (八咫鏡). Also known as the Three Sacred Treasures of Japan, the regalia represent the three primary virtues: valor (the sword), wisdom (the mirror), and benevolence (the jewel). These may be connected with Buddhist thought.
Now that its proven that the snake was kusanagi, who will get it? According to the legend, it will be kept as one of the Three Sacred Treasure of Yamato (Tsunade's necklace, Orochimaru's kusanagi and Itachi's mirror shield).
Your toughts? What will happen to Totsuka sword, Yata shield, and most importantly, Kusanagi?
I for myself believe that Sasuke will get kusanagi, and that the other 2 are lost forever.