Hey guys,
I just did the valvetrain on the engine I'm building (along with most of the rest of the engine)...A "How to rebuild your smallblock Chevy" book said when setting the valves w/ hydraulic lifters to tighten the rockers till there is no play between the rocker and pushrod. Then, while spinning the pushrod tighten the rocker slowly until very light drag is felt on the pushrod. Once the drag is detected turn the nut a half turn more. When I did that half turn I saw the pushrod push the lifter down a little bit so now even when relaxed the spring in the lifter is slightly depressed. Is that right?

That is correct. It's called "lashing the valves". The plunger is supposed to be pushed down just a slight amount - 1/2 turn sounds right - on a hydraulic lifter-equipped engine. It should keep the valvetrain quiet for the duration of the cam/lifter life.

Every time I ever tried or everyone I ever knew that tried using the "spin the pushrod" method ended up finding that it ends up being way too tight.

I consider zero vertical movement of the pushrod between lifter and rocker to be zero lash. That works well, then add your half turn.

Yeah I had that problem on my pickup, but since this engine is so new and clean I had no problem feeling the slightest amount of resistance while spinning the rod.