My brother has made an Obsidian Tools Mod, but it's not for SMP at the moment. I have been trying to convince him to learn YAML so he can script one for bukkit, but he's too busy working on other mod ideas. I'll let him know about this little thread and maybe he can get to work However, would Justin even allow something like this into the game? That's what I want to know.
I like this idea, when it rains, or dirt blocks next to water can turn to mud, and have the same physical effect as soul sand (slower movement and sink a little).
@ folks asking for new recipes: New items, blocks, and recipes would all require not only a server-side plugin, but client-side modding as well. EMC runs with vanilla clients, so unless Justin makes a new, modded server group for EMC, you're all out of luck here.