Okay I'm updating my blog because I got an email from Gabe Newell hinting a new Nintendo game at E3 2012. I actually emailed him to ask what kinds of games Valve will reveal at their E3 conference. I got this response:
"We're going to a different conference for part of our trip. The gloves are coming off there, if you know what I mean."
Now I may be bad at video game characters, but the only game character I can think of that wears gloves is Mario. Given his indentation of "gloves", I think it's safe to say that it's Super Mario Source.
I'm a little doubtful about this, though. How would Mario work on the Source engine (which is usually made for FPS's)? How would the platforming experience be upheld? I mean, I understand Gabe Newell's admiration for Super Mario 64, but will this game work, if it exists at all? Personally, I'd be better with a Metroid: Source type of game (IF it's a Nintendo game at all).
Those are my two cents on this. I may have misinterpreted, and I hope my hypothesis of Super Mario Source is incorrect, but that's what I heard, and that's what my current hypothesis is.