When I played my first comp round I hit the ball into a hazard and asked my playing partner for advice on the drop procedure. i was fairly sure I knew, but, I just wanted it clearly defined. I used my driver to measure two club lengths and went to drop the ball with the club still lying on the ground. My playing partner cautioned me that doing this was a two stroke penalty. I had never heard this rule before, was he correct?

Tell him to go back and study the rules Danny.
No penalty for this, you just need to re-drop.
No actual need to measure the 2 club lengths fwiw,just has
to be within that distance.
Probably best to go through the process at this stage;especially if
you’re playing with these half-baked rules experts.
Heres a cut & paste of the rule from USGA site for you.

Rule 20-2 Dropping and re-dropping.
a. By Whom and How
A ball to be dropped under the Rules must be dropped by the player himself. He must stand erect, hold the ball at shoulder height and arm’s length and drop it. If a ball is dropped by any other person or in any other manner and the error is not corrected as provided in Rule 20-6, the player incurs a penalty of one stroke.

If the ball, when dropped, touches any person or the equipment of any player before or after it strikes a part of the course and before it comes to rest, the ball must be re-dropped, without penalty. There is no limit to the number of times a ball must be re-dropped in these circumstances.

As long as it doesn’t hit it that’s ok. But as said above, if it does, just re-drop.

He may be getting confused with leaving a club on the ground to indicate the line of play, which is of course prohibited.

yeah, if it hits the club, re-drop with no penalty. if it does not hit the club, no worries.
he is probably getting all worked up with the “it hit your equipment’ penalty, but that does not apply in this case.