What I expected to happen was:
Water to be absorbed

What actually happened was:
Water was not absorbed

The video below quickly shows these problems
http://youtu.be/f0l5CRiB-R0

Steps to Reproduce:
1. Keep placing sponge in a pond

Steps to Reproduce:
1. make a 2x2 hole 1 deep
2. choose a corner to place water, but dont place water yet
3. make a hole for the water to flow into so it doesn't flow in the other blocks in the 2x2 you made
4. place water
5. place sponge diagonal to water