No, it's not Half Life 3. But Valve was working on another game. It was called Half-Life: Threewave, and you can get it running on your PC today.
If you've not heard of Threewave before, it's basically a capture the flag mod for the original Quake. Chances are most people will remember Threewave from Quake 3, however, which was such a supreme community effort that it ended up replacing the game's inbuilt CTF and Clan Arena modes.
As it turns out, Valve were looking at bringing the Threewave mod to Half-Life as well. And when their servers were hacked in 2003 — the same infamous hack that resulted in the leaking of Half-Life 2 — people also discovered a folder with Valve's take on the Threewave maps from Quake.
The Valve News Network YouTube channel has since gotten their hands on all of that. They've also got it working, servers running, and you can download the mod for yourself and get it running now.
The fact that the files for this were found on a random FTP server in Vietnam is pretty incredible. And if you want Half-Life: Threewave for yourself, it's available in a ~58mb download from Mediafire.
To install, all you need to do is drag the folders in the .RAR file into your HL1 install folder and restart steam. "My server will be running for a week, however if it remains popular I will keep it up longer," Valve News Network's Tyler McVicker added.