Bryan,
You may find that it is almost impossible to accurately describe the process of "How to read a word description and convert it to ladder logic". The short answer is "I did it in my head, using 30+ years of accumulated experience". How does that help you?
It might help to understand the basic parts of a ladder rung, as follows:
| INPUT SECTION OUTPUT SECTION |
| STOP SECTION START SECTION |
|----||---|\|------+-------||--------+------------( )------|
| | start 2 | |
| +-------||--------+ |
| | | |
| | SEAL-IN | |
| +-------||--------+ |
There are some shortcuts and aids, such as Karnaugh Maps and State Tables, but you do not know those yet, nor even enough to understand that I and several others, such as Alaric, have described parts of the process several times, in different places, but you must have missed it. Apparently your impression of how to get from words to logic is not very clear.
Okay, here is another try at describing the process.
"when lights 1 and 2 are turned on Y1 will be off.." means that AT THIS STAGE OF THE PROCESS, Lights 1 and 2 have no effect on Y1. They WILL NOT turn it on. "Lights 1 AND 2" means that these two INPUTS are ANDed together, in other words, joined in series ---||----||--- like this. Because these two inputs in series must not turn on Y1, we know right away that there must be another inhibit contact (a normally open contact from the Y1 output as Genius explained at least once) that will keep Y1 off until the next step.
"and remain off until light 3 was turned on,.." means that when Light 3 is ON, then Y1 must go ON. Converting this little part to ladder logicand including the REverse Switch, results in merely |--||--||----( )--|
"Y1 will remain on after light 3 is turned off.." means that AT THIS STAGE, Y1 is latched (or sealed in) so that turning off the thing that turned it on in the first place will have no effect. If you do much PLC Programming, you will need to learn about seal-ins and where to use them. You will see this subject again and again, unless you drop out.
"...as long as lights 1 and 2 are on" means that (after Light 3 is off, Y1 stays on until Light 1 OR Light 2 is turned off. Then Y1 also goes off. Again, there is AND in between, so we know that these two Inputs muste be Boolean ANDed (in series. If it said Light 1 OR Light 2, then we would OR them together (put in parallel). Converting this results in |---||---||----||---||---( )--|.
Questions?