it seems that this distfile is not on gentoo mirrors. After I DL-ed it manually and put it in /usr/portage/distfiles, emerge finished without an error.... Reproducible: Always
Cups seems to be gone from sourceforge download... old versions already made it to gentoo mirrors, but any new version won't get picked up without using new cups download urls, e.g. http://ftp.easysw.com/pub/cups/1.3.8/cups-1.3.8-source.tar.bz2
*** Bug 232985 has been marked as a duplicate of this bug. ***
I've solved this temporarily by putting the tarball into /space/distfiles-local on dev.gentoo.org.
Thanks I'll correct the download URL after the weekend. Previously it took some days for cups to hit the sourceforge mirrors so I put every new versions on /space/distfiles-local/, too. I really apologize for forgetting to do that yesterday. But as it seems cups-1.3.7 never hit the sf.net mirrors at all so think it's a good idea to switch the ebuild to something else now.
Fixed in CVS, thanks for reporting and uploading the missing tarball.