Saw this up at the mokes a couple of weeks ago. Was swimming around in the open a few hundred metres from island. It was pretty small, less than 50cm long... I have no idea what it is, a snake eel?

Doesn't quite look right for a snake eel, head not long enough and wrong colour I reckon. Looks like a Yellow Garden Eel. There is some Garden Eels at the Knights but thought they were different species.
Very cool whatever it is.
As Cirrus says, never seen them out of the sand but guess they can if they want.
Strange.

What did it taste like?

I agree with Terrapin's id but its very unusual to see these things up in the water column. They usually stay buried (during the day time at least) in coarse clean sand.  Can be very abundant.