Can HYSPLIT be setup to run a short-range dispersion calculation? If so, how?
The suitability of HYSPLIT for short-range applications depends upon what distances you consider to be short-range.
The model’s internal time step cannot be less than 1 minute. Therefore assuming an average wind speed of about 5 m/sec, the model’s minimum distance scale is about 300 m. If we assume that you need at least 4 data points to represent some spatial variation, one can estimate that the model’s resolution is about 1 km. Using the same reasoning the model would need to read meteorological data of the same resolution according to the problem you are trying to solve. For instance if all you had available was ECMWF global model data at 50 km resolution, a plume simulation of a few kilometers in length may or may not be appropriate depending upon the complexity of the local terrain and meteorological conditions for the simulation time (perhaps a frontal zone is nearby).
There is no simple answer. But in general for higher spatial resolution simulations you should set the concentration grid down to about 0.005 degrees and run with the 3D particle dispersion option. You may need to modify the particle number release rate. The other dispersion options I would leave at their default values.