Having read the advice to book in advance in Madrid for May, I've just tried to book ahead at two hostals for early June. They both said they won't take reservations more than 30 days before arrival. How common is this practice? (I think Hostal Lopez would take a reservation further in advance, but they are full).

This is pretty common, actually. I wouldn't say it's the norm but yes, common. Many will take reservations as much as 2 or even 3 months in advance. Many hostels still take/keep records on paper/pencil in a reservation book. There are a few out there taking reservations many months in advance but I don't recall which they are.

Also, if some hostels say they're full when asking about dates far in the future, there's a good chance that they simply don't take reservations that far in advance. You could try calling those back about a month beforehand and ask again and a room might "magically" appear.

Good luck! Saludos, MadridMan

Thank you MadridMan for your helpful reply. And have a cool time in Madrid. Buen viaje!