Basically, sometimes when you break a block that should drop a block it doesn't, even though the breaking animation plays. I've seen this occur with both torches (sort of) and gravel so far, though it is more easily reproduced with gravel. Furthermore, I made sure they didn't just fall off to the side.
To reproduce:
1. I started with a stack of 10 gravel blocks.
2. I placed down a single gravel block and jumped on top of it.
3. I created a tower of gravel using the common method of jumping and placing a block at the same time. The end result is that I am now on top of a gravel tower 10 blocks tall.
4. Break each block from the top in succession until you reach the bottom.
5. You should notice that you no longer have 10 gravel blocks.
The number of blocks that seem to disappear varies, though it's usually around 1-2 per stack.
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Yeah that always worked like that. "Gravel blocks that don't drop flint can be picked up, placed, and destroyed again. However, if a gravel block drops flint, it does not additionally drop a gravel block, preventing the creation of an infinite amount of flint." (Quote from minecraft wiki: http://www.minecraftwiki.net/wiki/Gravel)
Okay, well now I feel stupid. I guess I just never noticed it before. Sorry for freaking out and creating a useless bug report!
Are you sure it's not just turning into flint?