Quote: "I could encrypt the files"
Encryptors suck, FPSPack is even to hack, and Darkfact showed some of us a way that Vishnu can be cracked too.......
All they do is unload the files to a special folder at runtime, then delete them when you close the game....
PGPS is similar, seriously, it won't work.....
Quote: "I could ask permission..."
Of course, they're gonna allow you to basically give away media they spent years and thousands of dollars to make, I'm not talking about models, but stuff like design, concepting, they'd only let you use it for a (big) price......
Quote: "I could keep it to myself, I could release a version with no valve models,"
These are your best options mate.....