as far as from what i was told in the old rare collector forum - you can still craft with sea serpents scales, however, if you do you no longer get armour called "sea serpent scale armour" as far as i am aware this has now been changed and crafting with serpent scales now gets you armour tagged "blue dragon armour"
hope this clears it up others may be able to explain in more detail
*edited to correct my trerible speelingz* hehehe