But won't talk about Half-Life 3
A group of lucky 4chan members visited Valve HQ recently (what?!) and they tried to get some questions in on upcoming projects during their visit.
I'm glad that someone asked about those hints to a Source 2 engine that we saw some time ago. When asked about it, studio boss Gabe Newell answered: "We've been working on new engine stuff for a while."
So there's your confirmation. Joystiq says that he goes on to troll that they've been waiting for a game to use it on. Right.
Another question from the group asked if the new engine would be more than an extension to Source, like a new "entirely new engine."
Gabe simply replied, "Yeah."
In related news, the same group was also able to get him to confirm that Ricochet 2 is in development.
You can check out a pretty poor video of their visit on YouTube.