When you enter the room with the fire breathing snake you will see five columns around the snake pool. Slash those colums with your sword or staff and knock them onto the snake. For best results, use L1 or R1 to move to the next column, then hack away. If you're quick enough the snake won't get a chance to breathe fire.
After all of the columns fall, the fire will stop and the snake will start biting at you. Dodge him when he strikes by pressing L1 or R1. When he starts to swing around the pool strike him in the head. Do this four or five times and he's dead!
Cheat Codes
Go to the main menu in Nightmare Creatures and enter any of the following codes to enable the corresponding cheat:
Everywhere..........Level Select
Boulon..............Unlimited Lives and Items
Gu..................Enable Slicing
Bronko..............Play as a monster
Note: The "choose any level" code must be entered first and then any of the other codes can be entered.