I just stumbled upon a project by a researcher trying out different tech of a real time voxel-based physics engine. It's unnamed yet, but he showed some interesting demos regarding fluid sim in voxel matrices, rather than with particles. Some moments look like he is playing with melting clay, in which erasing the bottom of structures has their top actually fall with their own weight and stuff. I thought it was interesting.
EDIT: and by the way, this one also runs entirely on the GPU.
Link:
A sandbox voxel game on GPU -
forums.tigsource.com/index.php?topic=66011.0