Some people just can't be pleased. Try not to take it personally. Maybe speak with someone above him/her and make sure they know what's going on, in case your boss tries to formally reprimand you.

that my friend, is called business

Welcome to the real world. Rules don't matter and you'll never win.

One thing I've learned in all the years I've been working - when management complains about overtime, what they really mean is that you should still work the extra hours, but not ask for payment for doing so!

My response would be to stand there looking at them like you're trying to comprehend how a human being could be so stupid before shrugging and walking off.

As long as you are getting yelled at, smile and leave an hour early,

Sounds like your work has some management issues. Wouldn't hurt to use some of your time off (what little they're giving you) to start applying at some other places that're a bit less dysfunctional.

Your main job is to please your boss and not decide how to interpret what upper management wants. If you work overtime because your boss requested it, then your boss will have to deal with the higher-ups.

If it makes you feel better, my company, who pays about 20% under the national average "because they pay OT", forced us to work 4 hours before we get paid OT. And our OT is basically the hourly rate.

If your boss is looking for reasons to yell at you, it's time to start handing out resumes. Start looking now.