When I'm on a step hill pointing up. I pull the handbrake up. Take my foot of the brake pedal. The front of the car drops about an inch. Is this normal??
Absolutely normal. When you take your foot off the brake, the front brakes are release which puts all of the stopping power to the rear brakes where the hand brake (E-brake) is applied. Once this happens, the vehicle moves a little bit, loading up the rear brakes, which (depending on the vehicle) can cause the rear suspension to rotate, thus causing a small raise in the back end. This can be perceived as the front end dropping.