Not sure if anyone caught this yet, but yeah, it's coming out someday.

Here's a "pic" that may be a hoax

from http://www.thatvideogameblog.com/2008/01/06/first-half-life-3-screenshot/

But the article goes on here to say that half life, "won't end" at episode three.

It doesn't look like a screenshot to me. Looks more like a painted production still than a 3D render. That doesn't necessarily make it a hoax, though. It could still be from Valve and could still relate to Half Life 3.

What makes me think "hoax" is that we're waiting for Half-Life 2: Episode 3 and not Half-Life 3. For them to be reworking the graphics (as it appears here) would seem odd when it's more likely that they would just be using the current engine, graphics, and assets for the next episode of HL2.

...unless the next episode is the sequel, which I've not heard any news of.

Anyway, the screenshot looks detailed and impressive, wherever it came from.

You know, I've read interviews where some of the Valve developers view their episodic product AS Half Life 3. In it they said that the chapters should have been called Half Life 3. Episode 1, etc. The titles would have been much less confusing that way.

Edit: Found it.
By the way. Have you guys noticed that the time span, from Gordon's point of view, is like less then 24 hours during the course of all the games? Just imagine. He goes to work to do a secret experiment that blows in his face, allowing interdimensional monsters to go pouring out through space time rifts. He spends several hours battling these monster plus soldiers trying to murder all the scientist to keep this event quiet. At the end of the day he's made to go through a rift to the other dimension to stop the hive mind creature organizing the cross-dimensional invasion. As he finishes that, he's whisked up by some mysterious Smith/G-man type agent who stores him in a weird space time pocket, effectively freezing time for him. Mere seconds later, from his perspective, he's awakened and released, only to find out that several years have passed and that Earth has been taken over by a different interdimensional creatures. Then he plays hero again for several hours from his perspective. He steps through a malfunctioning teleporter that doubles as a time machine, sending him a weeks into the future, where his actions has sparked a full scale resistance against the alien occupiers. More fighting, things explode, G-man appears again to take Gordon away but is stopped from doing so, episode 1 takes place immediately followed buy episode 2.

Now this, is a fine example of a very bad day.

Apart from being knocked out, couple of times, throughout the games, I've never noticed a cut scene where he actually lies down to take a breather. If episode 3 doesn't start at least, few days later where he's had a much deserved rest, I don't know how Valve can justify that this man is still standing.

Also:

I don't think vlve would go ahead and start making Half Life 3 because they're not even done with Half Life 2: Episode 3 yet.

How would they even do that?