Cache Needs Decryption error
From Valve Developer Community
This error occurs when you try to run the SDK without having ever launched Half-Life 2.
To fix this error:
- Run Half-Life 2 from Steam's Play Games window.
- Run the Source SDK from Steam's Play Games window.
- If the problem is not resolved, repeat these steps running Counter-Strike: Source and Half-Life 2: Deathmatch.
Running these applications causes them to validate and repair any cache problems they may have.