What a triumph this is! I love the humor. It made me giggle aloud. I think Snape was blushing because he didn't want to admit he was looking at little baby Harry, not up Lily's skirt. :)
This was terrifically done, with lots of subtle touches throughout. I particularly like the way you showed Snape's disappointment/misery from above, as he looks at the statue, with only a few lines. He looks as if this is exactly what he expects of life, and isn't at all surprised by it.