Ah, well, it's been answered before, but what the heck.
You need any (bought, not free like Portal was!) Source game associated with your account in order to have the rights to download Source SDKs. Cheap Source games (including the Source SDK) are for example the HL2 episodes. (check the store page of the game to see if it includes any SDK, note: also Alien Swarm will NOT work)
Alternatively just search for games including the SDK via advanced search options - maybe there's a game you'd like to buy anyway, that includes the SDK as well.
You can also buy any game including the Source SDK as a retail version (if available) if that's more comfortable for you, you'll be asked to activate it with Steam upon installation and it will be associated with your account. (note: you can't resell games that are activated with Steam because your game key is bound to your Steam account) As far as I know, you don't have to have the game installed to proceed to downloading the SDK, so you might as well just chose Games -> Activate a Product on Steam and just enter the key cancelling the installation. The game will be listed in your Library under Games.
Then (in the Steam client) go to Library, select Tools and install the Source SDK Base 2007.
Since you already installed the mod in the correct folder, you might have to restart Steam once, afterwards. GE: S should appear in your Library under Games like this: