We hadn't anticipated that so many people wouldn't have HL2: Episode 1, but all is not lost. You can still play the mod if you have Half-Life 2 and Source SDK Base installed. Source SDK Base can be found under the Tools tab in Steam - so make sure you have it and Half-Life 2 installed and read on...
Now your going to need to make a shortcut to launch using Source SDK Base. So, make a new shortcut wherever you want it, and fill in the follwing in the the Target & Start In fields:
Target:
"Path to Steam.exe" -applaunch 215 -game "Path to Bloodstone mod directory"
Startin:
"Path to Steam directory"
You should then be able to launch the mod, have fun.