I don't think it's exactly a hack. It may just be the item drop system encountering a glitch in the programming that processes the time people have been in servers and then what to give them, wrong. It work by giving out a hat and a weapon to players every two minutes or so indefinitely. I was on for ten minutes and I was spammed to death. I sent Valve an email and got a reply saying there were aware of the bug and were "looking into it".
So basically, I have to wait till they fix it before I can go into the servers again. I'm scared that I will lose all of my other items or be banned for hacking. It's a VERY nasty glitch/hack.
EDIT: Maybe we can get someone to make a sticky about this issue so if anyone else on the servers gets it, admins won't ban them and will be able to inform everyone, especially those affected by it, on what is going on and what to do.