I soak up the excess water with a towel first and only 80% dry my hair; leaving it slightly damp and holding the dryer about a foot from my head?
That's about exactly what I do and it works well for me.
Alex
I think some folks round these parts are way too paranoid about blow-drying. What you're doing sounds more than fine to me - I would only be cautious about blow drying if you have curly hair (even then, my ex had long curly hair and he always used a drier on his hair). FWIW I think that having a damp scalp for prolonged periods is a very bad idea with regards to yeast-induced dandruff becoming a stubborn problem to deal with.
the thing with blow drying is the heat and blasting the roots--if you run the dryer with no heat (some have that option) and don't hold the end of the dryer right down on your scalp with the fan on max it should be okay. no heat and gentle air movement. having the heat on high and cooking your hair is what got blow dryers a bad rap.
I just put the dryer on 'Style' and use the cool button. Have stopped using heat...gives me split ends. My hair isn't as long as most of the guys here but I'm working toward long hair and can already tell a difference.