I don't share your optimism.
Unless EP3 is a 2/3 hour long cinematic whitout any gameplay whatsoever, just explaining what the hell was going on from HL up to the end of EP2.
I mean, i agree with snack. If feels like they went with a couple of interesting, egnimatic, random bits and they have no idea how to make an actual story out of it.
For all we know they're reading through the thousands of web pages filled with fans speculation to see if they find anything they can use...
I don't blame Valve, mind you. They probably never thought they had to come up with an actual story for their HL games untill the fans started praising the...'story''...

Yeah, I kind of agree that Half-Life is over-zealously worshiped. I mean, I think it's one of the best games ever, but the game has no amazing story by any means. Half-Life 1 is your typical action "OH SHIT EVERYTHING'S GONE INSANE GET OUTTA THERE!". With Half-Life 2 and its episodes, they've been kind of tacking it on as they go along. It's not absolutely awful, but it is not Oscar material. I think they've kind of painted themselves into a corner by tying the Half-Life and Portal universes together, especially since it appears that you'll be visiting an Aperture-owned location soon. I bet that's what is taking so long. They just thought to themselves before they released Orange Box, "Portals + normal guns = AMAZING GAMEPLAY!" and as they're working on it, they're seeing mistakes they've made and are struggling to find out a fun way to have it done.

HL2:EP3 will be a 10 minute cinematic of you waking up in your bed finding out that HL1 through HL2:EP2 was all a dream and now you're late for your job at some faceless fast food joint.

Anyone here besides me play through the Half-Life episodes in Developer Commentary mode?
If the designers of Half-Life put half as much thought into their story as they did into the cinematography and gameplay of the series, then there would still be an impressive sci-fi conspiracy mindscrew behind the game's plot. I have no reason to doubt them.
And, let's be honest, there really is not that much that has to be explained. Most of the Half-life universes' "plot" is extrapolation from known data anyway. The only thing left in the game that demands explanation is "Who is the G-Man?"
That's it. That's all the player needs to know. Who or what is the mysterious puppeteer who keeps dropping Gordon into suicidal situations? Once that question is answered, pretty much everything else either solves itself or falls to the wayside.
As to the episode itself... I dunno WHEN they'll release it, but I have no doubt that they will. The thousands of slavering fans and their combined income should be plenty of incentive to put it out sooner or later. Presumably the Vortigaunts talked about your Half-Life escapades to the combine and to humanity. I suspect that they're the ones who started calling you "The Freeman" (The One Free Man) and popularized you as a messiah figure. The G-Man has portal technology that apparently allows him to manipulate time, so there's the aging paradox solved. The Nihilanth's status is a little hard to guess at, but given how the Vortigaunts seem to think you're their savior, my guess is that it oversaw Xen for the combine in the same way the Breen oversaw Earth ("We are their slaves...").

I love the commentary mode they do, It gives a great insight into their though process when it comes to creating games. They talked about how they can draw a players attention to a set piece they want them to see without taking control away from the player. I never noticed that whilst I was playing but it certainly worked.

Valve and Blizzard are the two companies whose methods--including development times--I do not question because their games are so consistently awesome and well-made.
And developer mode should be in as many games as possible, it's interesting how many gamers are curious about the way games are made.

I guess it depends on what your expectations are of "episodic" content. I just assumed Valve was going to take their sweet ass time as usual. But with the episodes they have more freedom to advance the story without necessarily coming up with a whole new game engine and making any major technological revolutions.
Also Valve is pretty smart about releasing their content to keep fans' attention. If you're tired of Half-life now, imagine how quickly you would've lost interest in the series if all three episodes were finished within that first year it came out. I'm a Valve fanboy, but the quality of their games are consistently surpassing and evolving the industry the length of time between their projects is entirely expected.

1 - Make one L4D game every year.
2 - Sell it for the full price.
3 - Screw HL2 EP3.
4 - ???
5 - Tons of profit.

It's been long enough my interest in the title is waning a lot. The longer the wait continues, the less I am bothered at picking it up at release.
Also a fan of 'commentary mode', and wish it was something we could see more of in other titles, as long as it remains entertaining/insightful.

It's called the Black Mesa Burger Emporium and Valve will gladly charge you $60 for it.

/Unrelated stuff/
Uhm, this reminds me that I should replay Half-Life 2 someday. Amazing experience, even if played on a crappy Pentium 4 with a crappy HD and a crappy GeForce 4 Ti4200 back in the days :-P

It always makes me laugh how people say "im less likely to pick it up on release". That is not any sort of threat, if your going to buy it, buy it. If your going to not buy it then dont. No one will miss your sale.
Anyway, they really NEED to take there time with this. If episode 3 is a let down them valve will allways be rememberd as "those guys who ruined one of the most amazing series of games ever". Plus its a game, if you cant wait for a game so badly and then deside to not buy it because they take so long you are a idiot.
Simple as that. You dont lose anything for having to "wait" for a game.
As long as it is the best gaming experiance ever then they can take another 10+ years if they want.

Not a threat in the least.

"it's not even clear what form a new game would take."
"there won't be any game from the franchise in 2010, and what will finally come out is still unknown."
-
Great Valve, just great... Now no Episode 3, no Portal 2, and we will play an HL3 MMO crap buying hats and glowing crowbars, and of course, items from L4D3.