I'm not sure how it's misleading. You can sign up and have one snitch for free. It would be misleading if I said sign up for free and then didn't allow you to create ANY snitches without paying.
Yeah, say that exact thing _before_ people sign up. Just cut and paste "You can sign up and have one snitch for free." into the main page, so it's crystal clear to everyone, and hearsay from HN does not prevent people from creating the free account :-)
I think the problem is that without signing-up, there's no indication that it's a paid service, let alone what the price actually is.
A "Pricing" page in your navigation would be ideal, IMO. Even an entry in the FAQ ("How much does this cost?") would suffice, especially if it's the top item.