Yes, “voxel” is not “block” (Minecraft).
You can extract arbitrary shaped landscapes like in: IsoSurface Demo - Dev blog experiment... (released)
This “isosurface demo” might even be converted somehow to be actually useful.
In its current form it has floating rocks in mid-air, which you must remove.
And you will want to change these isosurfaces at runtime to edit the terrain (currently procedural only).
You might ask in that thread of pspeed for details and possible solutions.
The other voxel-thing that I posted earlier was part of the GSoC (Google Summer of Code).
It uses marching cubes to extract arbitrary shape (like pspeed in his isosurface demo - same technique).
Marching cubes can be optimized like in the GSoC thing.
The original marching cubes is still quite blocky (no cubes, but always the same patterns).
I think there are 12 or so possible shapes if you take the original marching cubes.
The optimized versions of that algorithm give you more freedom for the resulting shape.