was getting same error when trying to start half life using command propt or through run in Hammer. Rarely compile in Hammer, but did on test map just to insure correct settings for steam.
In hammer, point to steam.exe as the game executable.
When compiling add -applaunch "070" as an additional game parameter.
If compiling through batch files, as I do, add
"directory_pathsteam.exe" -applaunch "070" +map "map_name" at the end of the batch file.
Thanks to XargoL I was able to fix same problem today
Hope this helps.