I'm going to simplify this tutorial. Assuming you already have the .gif . You just go to this
website and attach the gif. It will automatically generate the .vtf and .vmt files for you. Then you can copy/paste the files into your CS:S spray directory. While in game, select the spray and your good to go. The website automatically generates the spray into the correct file size. Which does not exceed the 512kb file size limit.