If you watch catchers at a high level, their hand is away from their ear. Ideally, your elbow will be slightly higher than your shoulder, and the angle of your elbow will be slightly more open than 90 degrees. My son worked with a catching coach who played professional baseball for nine years, and his advice was as given above, and he wanted my son's hand facing outward as your describe Ramon Hernandez doing. You get a lot more on your throw, and put less strain on your arm, when you throw this way. If a coach is telling you to keep your hand close to your ear to be quicker, he most likely isn't too familiar with catchers. Your footwork will have far more to do with how quick you are throwing down to second than taking a shorcut with your throwing motion.
A good way to practice this is in front of a full length mirror. Practice like you've just received the pitch, are coming out of your crouch and making your transfer. Take the ball directly back from the glove to that "L" and freeze. Do everything right up to the point where you'd start your arm going forward. You're working on your footwork at the same time, using the mirror for feedback. See how it looks, and feels. Then once you have it down correctly, keep working at it regularly until it becomes second nature.
If you stop and think about this for a moment, how many pitchers take their hand to their ear with their elbow cocked in tight? What do you think it would do to their velocity if they did? A certain amount of extension is essential to velocity.
