This is partly my work. TheBusGuy figured this out and I figured out the fix.
When valve made Left 4 Dead, they didn't include split screen for the PC, but they did include the code for it. In this I will show you how to get the split screen code working.
You will need an Xbox360 controller. I will address what to do if you have a different controller later on.
The first step is to download the code, its in the download tab.
Plug your controller in. Then open up your 360controller.cfg file, its in your "\left4dead\cfg" folder. Copy and paste the code you downloaded over the code in the 360controller.cfg.
Okay, now open up the game, open the console, and type "Exec 360controller.cfg" without the quotations. Then use "ss_splitmode 1" or "ss_splitmode 2", to set the split screen mode. "ss_splitmode 1" is horizontal, and should be used for regular monitors. "ss_splitmode 2" is vertical, and should be used for dual monitor setups and wide screen monitors.
You need to have the controller set to player 1. Start/join a game and as soon as the loading screen appears, unplug the controller, wait a few seconds, and plug it back in before the game starts. That should switch it to player 2.
Now type in "ss_connect", player 2 will connect and start spectating. To make him join a team type "cmd2 jointeam 2". That should fix the update glitch and work perfectly.
If you have a different controller than an xbox360 controller, you will have to download an emulator from Tocaedit.com. Then set up the controllers as you want them to be set up.
If you only have a differant controller, then go in the "xbox360cemu.ini" and set index to -1
Index=0 ----> Index=-1"
then scroll down and set pad 2 index to 1
this should make your one controller bind to player 2.
That is it! Enjoy!
P.S.- If I forgot anything, or if you have something to add, let me know!
There is a hack/code like this one for Unreal Tournament 3 at Moddb.com
I have figured out how to get split screen working after the DLC/update. I updated the summery, so you can take a look at that now. I doubt you care, but it took me three days of messing with it, to figure it out. I have also added a video, to make it easier to understand. Enjoy having split screen back!
Sorry for the horrible quality.