When mining or breaking blocks, they can fly up through the other blocks. This is a huge problem when mining because the items (such as diamond) can fly up to another cave, or even the surface. I assume this is where the items are going, because most of the time I can't find them. However when mining granite on the side of a mtn, I climbed the mtn after gathering granite and saw a lot of granite in item form floating on top of the mtn. This leads me to believe the blocks are traveling up through the other blocks.