Dogfish Clone

Hey all-
Just finished up brewing a Dogfish Head 90 minute IPA clone. I only wanted to do a half batch (2.5 gals) for various reasons. I used DME and the OG was lower than expected. The recipe I dug up gave an OG of 1.088 and mine was 1.060. I think I added a little too much water during the sparge of the filtered wort/hops. My question is would an extra half gallon of water account for this kind of decrease in OG? I assume it would. Is there a way of back calculating how water would affect an OG? Seems like I may have inadvertenly made a 60 minute clone instead, not that I am complaining.
Also, the recipe I found said to dry hop during the secondary fermenter stage for about 3-5 days and then cool the secondary fermenter down to 32F. I am a little confused on this. Won't this kill the yeast and prevent priming in the bottles? I am not sure if the recipe was designed for kegging or artificial carbonation.

Promash, beersmith or one of the online spreadsheets are your friends

Half a gallon of water is 20% of your batch size there, that would easily explain the gravity difference. Next time, just boil it longer if you overshoot the volume, or like was mentioned above use Promash to help you.

My BYO article on the Dogfish 90 calles for the 32 degree step at the end, I think it's to drop the yeast out for clarity purposes. I would definately skip this step and just age it longer if you are planning on carbonating naturally, because you're right, the yeast should drop to the bottom and go into hibernation at that tempurature.