I withdrew money from an IRA this year, I had 25% withheld for federal taxes, but none for state taxes in Michigan. While entering on TurboTax, my state tax bill increased considerably, my financial advisor says that normally the withdrawal is not taxed by the state. This was a total disbursement of the IRA... am I going to get hammered by the state as well?

Your advisor is incorrect - a withdrawal from an IRA is treated as ordinary income, and consequently those states that have an income tax will hit you for taxes on the distribution. What your advisor may be thinking about is that there is normally no withholding for the state at the time of the distribution - this doesn't mean state taxes aren't due, just that the custodian doesn't automatically take care of it for you. So yes, you are being "hammered" by the state as well as the feds for your distribution.