Alright. I got this working on my machine, so I know it works. If you can't get it working this way, I don't know what to tell you.
I'm doing this for 
Half-Life Deathmatch Source the basic principle is the same for all HL2 Mods.
The easiest way to get this thing running would have been to run vconfig, but the pos wont run! So, the only other option is to manually configure hammer.
What you'll need:
Half-Life Deathmatch Source FGD
... That's all.
- Change the game to something you know works, like Half-Life 2
- Once open, goto Tools >> Options
The only tabs you need to edit are "Game Configurations" and "Build Programs"
Game Configurations:
- Configuration >> Edit >> Add >> Half-Life Deathmatch Source
- Game Data Files >> Add >> [Path: $SteamUserDir\sourcesdk\bin\hl1mp.fgd] NOTE: NAME THE FGD HL1MP, this is the name of the hl1dm:s directory.
- Game Executable Directory: $SteamUserDir\half-life deathmatch source
- Game Directory: $SteamUserDir\half-life deathmatch source\hl1mp (Yes, there is a GameInfo.txt file in this directory after you run hldm:s)
- Hammer VMF Directory: You can make this what you want, but to be consistent with the other games: $SteamUserDir\sourcesdk_content\hl1mp\mapsrc (You have to make that directory manually)
At this point, I had to say okay and close hammer. Then run it through the SDK again. At this point, also, you can run it using the Game Option "Half-Life Deathmatch Source". I'm sure by this point you've noticed it's in that game list.
Go back to Tools >> Options
Build Programs:
Game Executable: $SteamUserDir\half-life deathmatch source\hl2.exe
BSP: $SteamUserDir\sourcesdk\bin\vbsp.exe
VIS: $SteamUserDir\sourcesdk\bin\vvis.exe
RAD: $SteamUserDir\sourcesdk\bin\vrad.exe
Compiled Maps Go Here: $SteamUserDir\half-life deathmatch source\hl1mp\maps
That's it.
Say okay, restart hammer and you should be good to go.
The only issue I had was that I got an error (filesystem error) when trying to run the game directly form the compilation dialog, however the map was copied correctly and all that jazz. Upon loading up the game, the map was not in my map list to make a server from. However, if I ran the console and entered maps * to see all the map files, it was in the list. And I ran it manually with "map mapname". It ran fine, I loaded a monster_ entity and it acted normally sound and all. I also had an automatic hud because I used a info_player_deathmatch entity for the spawn (that's sort of important as it was in HL1 editing).
I also spawned a shotgun with ammo. It all worked just fine.
As you can imagine HL1:S editing needs to be set up in a similar fashion. I'm not sure if you need a different FGD file.
One more note, since I didn't mention this before. The variable "$SteamUserDir" will work on your, or anybodies, computer with steam installed, since it is an environment variable created when steam is installed.
                                            
                        Blame it on Microsoft, God does.