in any game mode in the new snaps (14W06b) I dropped into lava, and in an instant saw everything (x-ray-ish..) only saw the blocks under the lava pool, but also saw the water dripping own from the obsidian above. (in fact when there is a block above your head in any depth, you can see it.)

recreation: set yourself on fire by taking a dangerous bath in the lower levels of the world of the lining, or even in HELL itself!

insert evil laugh

and please fix the blur on OS X soon..