While using the command below, it appears that FallingSand entities containing water or lava are not being displayed until they land on another block. I have noticed however, that shadows appear where they are spawned, and near the end destination.

/summon FallingSand ~2 ~1 ~ {Block:water,Time:1,DropItem:0,Motion:[0.0,0.5,0.5]}

It appears that this glitch has happened before in minecraft, was fixed, but has reappeared.

The gfycat link below is a video demonstrating the bug. As you can see there is a shadow on the command block (where the Entity is being spawned) and a shadow where the Entity is landing, but you cannot see the entity as it flys through the air. I also show that the shadows are being generated along the path of the water, but the water is not displayed until it lands.

http://www.gfycat.com/InfantileSlimyAlligatorsnappingturtle