I don't see a reason why shouldn't the block tool work.. try dragging a square on the top view, it's gotta work... or else I can't help you any further. Btw... press enter to create the actual block lol
When space is held down you can drag the viewports with the mouse, much like you drag the image in photoshop... so it sorta sounds like the spacebar input is stuck. Have you tried restarting Hammer or your computer?
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