Valve has cancelled its much-anticipated pre-E3 event, which had been gearing up to be a very interesting first-look for the public at the upcoming sequel to Valve’s very successful Portal.

If nothing else, a new Source would be very interesting indeed...

Rather than go ahead with the whole thing, Valve has cancelled the Portal 2 event in favour of launching a “surprise” event, which it has assured us will not end with the surprise being that there was no event after all, nor that the Portal 2 event will go on anyway. Now though, rumours are beginning to circulate about just what it is that Valve is preparing to show off that could trump Portal 2. The first among those suggestions has already been shot down by Valve’s CEO, Gabe Newell, who said that long-time fans of the series shouldn’t get their hopes up for a third installation of Half-Life, the third episode of which has been a long time coming.

With Newell having so thoroughly shot down the rumours that we might be about to see something of Episode 3, there’s been some very interesting speculation floating around, perhaps the most curious of which coming from TomsHardware.

According to its sources, it seems that one of the reasons that Newell shot down rumours of an Episode 3 release could well have been because the company is planning to unveil a new Source Engine, boasting Episode 3 as a full-fledged game, rather than an episodic update.

It’s hard not to wonder then, but could we be gearing up to see the first showing of a Source Engine 2, as well as, perhaps, the first glimpses of Half-Life 3? Nobody knows for sure, but it’s certainly some of the more optimistic rumour-mongering going on at the moment… and it would certainly account for Valve’s total silence on things so far.