The hypothetical scanning (HS) method is a general approach for calculating the absolute entropy, S, and free energy, F, by analyzing Boltzmann samples obtained by Monte Carlo (MC) or molecular dynamics (MD) techniques. With HS applied to a fluid, each configuration i of the sample is reconstructed by gradually placing the molecules in their positions at i using transition probabilities (TPs). With our recent version of HS, called HSMC-EV, each TP is calculated from MC simulations, where the simulated particles are excluded from the volume reconstructed in previous steps. In this paper we remove the excluded volume (EV) restriction, replacing it by a "free volume" (FV) approach. For liquid argon, HSMC-FV leads to an improvement in efficiency over HSMC-EV by a factor of 2-3. Importantly, the FV treatment greatly simplifies the HS implementation for liquids, allowing a much more natural application of the method for MD simulations. Given the success and popularity of MD, the present development of the HSMD method for liquids is an important advancement for HS methodology. Results for the HSMD-FV approach presented here agree well with our HSMC and thermodynamic integration results. The efficiency of HSMD-FV is equivalent to HSMC-EV. The potential use of HSMC(MD)-FV in protein systems with explicit water is discussed.