[kaolabear]

There was a game or tech-demo called "upvoid miner" a few years ago. It had worldgeneration similar to minecraft and proper physics with rolling tree logs. It allowed arbitrarily shaped terrain and I think liquid physics were worked on. But sadly the studio had to shut down due to not getting enough sales. I think you can still download it and test out the free tech demo though.

[big_chungus]

Wow, that looks quite interesting. Seems dead, but the folks behind it open-sourced the code: https://github.com/Upvoid/UpvoidMiner

GPLv3, unfortunately, but interesting nevertheless.