I was building a line cannon, and I noticed that even when everything is fully watered like this: http://puu.sh/7ofhE.jpg

it still destroys terrain, like this: http://puu.sh/7ofmG.jpg

It seems to not happen every time, but when I tested with the redstone pulse originating from closer to the TNT that was causing the problem, it didn't happen.

After further testing, placing 5 tnt from the end of the cannon works fine: http://puu.sh/7og5q.jpg.

However, adding a 6th one results in terrain destruction: http://puu.sh/7og8J.jpg