The phrase "a snake in the grass" does not refer to a literal reptile in a patch of vegetation, but rather a lurking, treacherous villain (and there was such a villain on the island, more dangerous than any the Baudelaires had ever faced). A figurative snake in the grass is always a source of peril, but a literal snake in the grass may be harmless, and indeed a source of delight.
"Bela!" cried Sunny in delight, hugging the large black snake which had suddenly rushed up to them.
Bela was an Incredibly Deadly Viper, discovered by the Baudelaire's Uncle Monty. It was entirely harmless; Uncle Monty gave it the misnomer "Incredibly Deadly Viper" as a practical joke on his colleagues in the herpetological society.
Bela and Sunny had become good friends. They hissed together, discovering they could still communicate.
"Sunny, if we ask Bela a few questions, could you translate for us?" Klaus asked.
Sunny agreed. In the conversation below, I will omit the intervals of hissing and give only Sunny's translations.
"Bela, the last time we saw you, a man named Bruce took you and the rest of Uncle Monty's reptile collection away in a van," said Klaus.
"Yes. Bruce crook -- stole Bela and others."
"Who was Bruce working for?" asked Violet.
"Don't know. Not V.F.D."
"What happened then? We heard Olaf stole the reptiles from Bruce," said Klaus.
"Disguised. Second van. Said from Bruce boss."
"But you got away?" Violet asked.
"All did. Green Gimlet Toad picked locks of cages. When door open all rush out."
"But Olaf captured all of you again?" Klaus asked.
"Man in cow disguise hunted. Olaf found all but Bela."
"How did you get away?" Violet asked.
"Went to man who runs Prospero. Got Bela on ship."
"How did you end up here?" Klaus asked.
"Enemies on ship. Seagull disguise. Threw Bela crate overboard. Sea took here."
Sunny stopped to ask a question of her own: "Are the apples safe to eat?"
"Don't know. Bela eats bugs, small rats."
The children made a face at this idea.
"Have you seen any villains around recently?" Klaus asked.
"No people but you. Bela asleep most of morning."
"Will you watch for anyone acting suspiciously and tell Sunny?" asked Klaus.
"Bela will."
"Thank you, Bela" said Sunny.
"Bela loves Sunny."
"I love you too, Bela," Sunny told the snake.
It was now late in the afternoon, and the children took their leave of the Incredibly Deadly Viper.
"We need to check out the wild sheep and see if we can get milk from them," Violet suggested.
They walked down the hill to the west, working their way stealthily toward the sheep.
"Sheep are gentle, timid creatures," Klaus whispered. "Don't make too much noise or you'll spook them and they'll run."
The sheep were grazing in thick grass. The children inched forward like snakes in the grass to get close to them.
Suddenly, Sunny's hand broke a small twig with a snap. The sheep looked up. They saw the children. With glittering eyes and bared teeth, they charged!
A snake in the grass may be harmless, but sheep in the grass may sometimes be very dangerous.