what do you mean with vmasks? using a shader somehow to disable/enable the cubes?

i don't know if this would be better than simply creating the mesh of the 16x16x16 entity. i also don't know how your idea would behave with collision detection. with ent_setmesh() the collision detection data is supposed to get updated too. if this really works then is a different question. there have been some bugs in this regard previously.