Hi Saintbernadette,
I have done something similar to what you are contemplating, though my move isn´t a permanent one. I am second generation American. My grandparents came over from Madeira in the early 1900s. Anyway, we have been living in Europe for the past 10 years and decided to give Portugal a try. We had made several trips here and enjoyed it. So, I went to the Embassy in Ljubljana, Slovenia (which is where we were living) and spoke with them about it. They suggested a study visa which was really easy to get. You do have to have proof of income or savings, as well as health insurance though. Your friend is correct that Portugal seems to like those of us who are returning to the mother country. They waive several provisions for citizenship if you can prove your ancestry. If you know what town your ancestors were born in, you can go tot he church and get the birth registrations.
Anyway, good luck!