Okay, so it isn't just me, same thing is happening to me too, I was hoping to work on my map but nothing happens, thought it was just my computer being gay, hopefully valve will fix it soon.

Yeah, valve will have to fix it. I was working on a halloween map for a server and I saw a few glitches when I tested it after the update, so when I went back to fix it I saw it wasn't working... And restart doesn't fix it. This appears to be caused by valve's update which included source sdk and resolution... I really hope they come up with something to atleast allow us to use tools even if the current version is messed up.

Same issue here, but I figured out you can still map in older engine versions, if say, you port your custom stuff back to hl2. I still cant compile, but thats because my displacements are too complex for source 09

We'll have to wait for valve to do this, my tf2 map is extremely complex and I don't think the map from another source engine would run as well as the one for tf2's engine. Or if someone figures out how to fix it, then we could just use the fix until valve's fix. This problem stems from valve's screwing around with source sdk. I used to be able to type all letters until valve updated something, and now I can't map because valve updated something wrong and now its just messed up.

Trust me, its far from ideal, im just lucky that I work in garrysmod, makes switching engine versions relatively painless.

I worked with garrysmod once before but as it turns out not even that would help. Plus, I need the same engine version so that I could not end up with an error caused by tf2 not being capable with certain engine versions. Also, I believe the difference in engine versions is the vrad, vvis, and vbsp because earlier engine versions would result in darker maps than the "latest and greatest". It mainly has to do with compiling, and I am not a risk taker because so much effort has went into this map.

I believe it now affects other versions (maybe). It now affects others.

Good news and bad news.
Good news is that I have figured out the problem which was what the update said! Bad news is... valve updated the graphics shader and the work around is to set the dx level lower than anything even though my dx level appears to be level with source sdk and it affects other versions aswell. In order to be able to map again (or try) you have to launch hammer.exe with this setting (remove quotes): "-dxlevel 80". This appears to be the fault of valve in attempting to screw around with shaders with out testing, this update is now worse than the one that caused the hats and models to go black. And even the work around causes problems and screwing around with dx levels (someone else did) revealed that 80 is the only level that works and compiling maps are bsod (blue screen) prone.

Thanks for the info, i was able to get in and hopefully now i can finally do a full compile, any idea on other side effects apart from possible BSODs?

Well, models and shader would be affected by looking weird and I added the BSOD first because it was reported by some people and directX is a really major software that can make or break. I'm not sure about the compiling though because I've heard some people say that the work around, when compiling, causes BSODs. Either way, if valve causes a glitch that destroys the editor then it is the worst update in the history of crappy updates. I will say one thing if valve every gets around to reading any of the posts with this glitch, always test your update for glitches and pull the plug if you see a glitch like this before it updates. Between having an update that is on time that might have a massive enough glitch and a delayed update that does not have as massive as this glitch, then I would go for a delayed update.