On first glance, this looks like a "chunk loader fault" : a transient condition where a section of map (a chunk) doesn't appear properly client side (minecraft has a client-server setup even playing single player since a couple of versions ago).
If you place a torch at the edge of the "hole" to provoke a lighting update, this will often prompt the client to attempt to reload the chunk from the server. On SMP you can try relogging. Attempting to enter the chunk will cause your position to stutter, making movement almost impossible.
Note : this is a sneaky way of prospecting ore by sight 😉
Lately I've been playing with the Feed the Beast modpack, and finding a gradual buildup of poor FPS and randomly spiking fps.
I got fairly desperate with it, as the random nature of the fps falloff (F3 reporting single digit FPS around the 1-4 fps mark, with occasional 0 fps and sometimes upto 9 FPS) made the game unplayable due to its inconsistent responses to input.
I decided to try the current version of Optifine for minecraft 1.4.7. Having installed that and used, granted, minimal settings, the Optifine rendering engine delivers a stable, steady and thus playable FPS of about 15, using the same world that was unplayable under the default "randomly spiky" rendering engine.
While this doesn't necessarily point the finger firmly anywhere special, its does confirm that for the same (singleplayer) world and same computer hardware running it, there are some issues with the default rendering engine.
I know that isn't tons of help, after all, but it is a strong hint 😉