JoBoy,
To set an alarm on iCal, I click on the event and open the Get Info window. I then click on the iCal alert and select "message with sound." I then select the sound to be played by the alarm. I then change the default "15 minutes before" to show "two hours before." That requires me to click on the 15 and change it to 2. I then change minutes to hours and click Apply and close the window
I am not clear if you are reporting your actions in iCal on a computer or an iPhone / iPad.
I am running iOS 6.1.2 on my mobile devices. My computer is running Mac OS X 10.7.5.
In iOS 6.1.2, "2 hours before" is one of the options available in Edit -> Alert -> Event Alert.