@Heelx: That looks like the right track, although shouldn't the non-clipping be taken care of if you place the 2D sprite that represents the block at the correct point in the level to match up with the invisible hull? The wall and floor would be the background layer and the small block a sprite that is in front of it.

I'll play around with this code this week when I have time and am not so tired. I'm too exhausted right now and am going to sleep at a normal hour for once. Thanks to you and everyone else (XxX snapshot method sounds intriguing but would eliminate a huge chunk of the target market for the genre given the advanced shaders).