Pay no attention to Ryan C.

I've used a Surly flip/flop for a couple of years, and it's absolutely the most finicky hub I've EVER tried to adjust. In my experience, there's no way to get all the play out of the hub without having it drag due to being over-tight. I've just gotten used to the fact that there's always a little bit of play. It doesn't seem to affect the way the wheel rides, so I don't worry about it. Just make sure that whenever you adjust the hub, you get the lock nuts very snug, or the darn thing will have a tendency to tighten itself up while you ride. On more than a couple of occasions I've started a ride with a reasonably adjusted hub and ended the ride with a hub that would barely spin.