Heres my settings if this will help.
Edit: I asked some poeple in a server and they said its becuase my source mod is Team Fortress 2 and I don't own Half Life 2. Anybody know if thats true?
That's not true.
When you download Garry's Mod, even if you don't own Half - Life 2, You still get all the content from it downloaded. It really doesn't matter, so long as you have 1 more game.
I had similar problems while trying to run Penumbra. I just set the shader lettings to low, or medium, to fix it.
If you want this fixed, just set the launch options to
-dxlevel 81
Then you can re-set the resolution or whatever then take that off.
EDIT:
Waita minute! What's that you have there scribbled out in the corner!?