"Tapping the admiral" has a colorful history but not quite as colorful as often thought.

In 1805, Lord Horatio Nelson, commander of the British Fleet, was killed during the Battle of Trafalgar (he was shot by a sniper from the French ship Redoutable). The battle had been a victory, but its leader had fallen. To honor him, they were determined to return his body to England and went to preserve it in a "cask of spirits."

According to the familiar legend, that cask (supposedly of rum) arrived in port almost or completely empty—the implication being that the sailors had drunk the liquor from the cask bearing the corpse of their beloved Admiral. In other words: "tapping the Admiral." This is, of course, a legend.

Initially, Nelson was in a cask of brandy (later wine) and lashed to the mast under guard. When the ship arrived at England, the body was removed and an autopsy performed. It was noted how well the body was preserved—had it been exposed to air, as in the case of the legend, decomposition would likely have set in to some extent (this was the point of submerging a body in alcohol). He was then put into a coffin and taken to Greenwich where he was to lie in state prior to burial. There is no evidence that the cask was reported to be only partially full upon arrival.

Some might consider the placing of the guards to be indicative of a need to protect the Admiral from being "tapped," but an "officer's quarters were guarded by marines and posting a guard over Nelson's body should be viewed as a continuation of that honorary duty." Further, with a guard, it is unlikely that drunken sailors (who were already given a daily ration of rum) would be able to imbibe without overcoming the guard or with permission.

The question of "why" is intriguing. He was a fairly well-liked commander and that seems to beg for an explanation for the legend. Would sailors drink the alcohol from a cask bearing their slain leader on his final voyage? It would seem unlikely, though certain parallels with the Eucharist (and presumably similar rituals/rites) have been suggested—though more as to the origin and staying power of the legend rather than evidence of its veracity.

According to Jan Harold Brunvand, one of the foremost experts on urban legends and related folklore:

Many wandering Englishmen actually did end up being shipped home inside barrels of spirits after they died abroad, and in numerous instances the barrels were supposedly (who can say?) tapped, presumably always unwittingly.
(italics in original)

Was Admiral Nelson "tapped"? If he was, it would have been "wittingly." And highly implausible.

Brunvand adds to the origin of the phrase, itself:

British sailors formerly said "tapping the admiral" for drinking rum, against regulations, out of a coconut from which the milk had been drained; later the phrase was used for drinking surreptitiously from a cask by means of a straw inserted through a small hole.

(Source: http://home.xnet.com/~warinner/nelson.html, all quotes from there)