Was this single player or bukkit? A world cant just generate a chunk like that as a visual glitch. the server had to render it, but if the world type is flat, if a chunk generates as non flat thats a serious bug.
It's terrain generation failure due to lag, I made a post about it here: http://www.minecraftforum.net/topic/820545-new-chunk-rendering-to-reduce-lag/ There isn't really anything you can do about it.
This is a fairly common glitch with Single player - I've seen it in my super flat survival - You just have to ignore them.