You currently can't set mesh positions. Maybe we could enable that with copy and paste, like you can do with bones? For now a solution would be to animate the back and forth movement with the mesh rather than with a bone, so then only the part of the mesh you want to move would move. FFD doesn't do real rotation, "morphing" from one mesh deform to another is linear, but it would probably look ok here. You can do it easily: select the mesh, hold ctrl and drag to box select vertices for only the top part of the mesh, choose the Rotate tool, hover over the white X and then drag the pivot to the lower part of the mesh, then rotate the vertices. I expect you already know this though, as that animation looks great. 8)
