With the hydrometer Tabarie's principle (that the decline in SG of a beer/wort from adding a certain amount of alcohol to to it is the same as the SG decline in water to which the same amount of alcohol is added) is used. Problem is that I can't find any references to Tabarie's principle and I can't make it work either. Thus, as is the case with the refractometer, if you want to know the true extract and the alcohol content to any reasonable accuracy you must separate the alcohol from the beer and assay the two parts separately. Unless you own the now well known* Anton Paar alcolyzer (and even if you have it's brain, the DMA 5000M) this means hours in the lab.
*Well known since the Anheuser-Busch lawsuit. One of the news outlets took samples to White Labs and they used an Alcolyzer to find that AB beers were well within TTB reporting requirements but the Alcolyzer got quite a bit of play.