Actually yes, the GPL is fully complied with if the source-code is only available from Hyperion on a physical medium.
If somebody were to distribute the binary of Quake 2 itself (which they can do as opposed to copying the entire CD which is protected by copyright or the mods which are as well unless also covered by GPL), they must always be able to call on us to get the source even if they obtained their copy from somebody other than us (ie not on a CD).
Obviously the person receiving this source-code has a right to make it available for download.
Note that we opted not to include the source on the CD.
We're not obliged to do so and it doesn't satisfy the requirements of the GPL as other people who didn't get the CD must also be able to get the source.
Again, offering it for download is NOT sufficient to comply with the GPL.
The only way to fully comply with the GPL is to make the source-code available on a physical medium to anyone who requests it, at cost.
(See the GPL FAQ quote above).
I spent considerable time stuyding the GPL license which isn't exactly easy to understand in all its facets, not even for a lawyer.