Armourbearer,
Dried is the way to go! The tanning oil in the tanned skins is what causes the problems. Glue and finish won't bond. Like was said before, you definitely have to remove all of the scales!
I just finished my first attempt at "snake skin install" on my recurve and I'm really happy with the results.
I got my skins off ***y from a particular seller. I think I paid $45 shipped for a pair of western diamondbacks that were both aobut 42 1/2" long. Best quality I found. Let me know if you want the sellers name, you can just do a search on ***y and find him. He always seems to have skins for sale. Hope this helps.