"The source code distributed with this version of the Source SDK is not compatible with the "Orange Box" version of the Source Engine. The mod you create will be compatible with the "Episode 1" version of the Source engine"

Then nothing happens. No Mod is created.

In the "Current Game" drop-down list only Episode II, Portal and Team Fortress are listed.

If I try to launch Hammer Editor I get this message:
"Setup file 'gameinfo.txt' dosn't exist in subdirectory 'c:\program files\steam\steamapps\user\portal\portal'. Chdeck your -game parameter or VCONFIG setting."

Not sure if this will help, but this is the first thing that came to mind:

The Wiki wrote:
Error: Missing GameInfo.txt

This occurs when the Current Game is incorrectly configured. This can happen when:

* The Game Directory is set incorrectly so the tools cannot find the gameinfo.txt file.
* A gameinfo.txt file for the game is missing or incorrect.
* Installing/Restoring HL2 games from a backup that was created via the "Backup Games..." menu, but not having actually played the games after the install (HL2, EP1 etc).

How to fix this problem:

* First and foremost run the game (HL2, EP1 etc) at least once before running the SDK tools like hammer. Running the games for the first time will create the gameinfo.txt and related files that are used by the sdk tools.
* If this is a custom MOD, make sure the Game Directory is set correctly, and that a valid gameinfo.txt is present.
* Try running the game you're editing for once from the Play Games window.
* Try to Reset the Source SDK Game Configuration.
* If that does not work, Reinstall the Source SDK installation.