When I was on yesterday I noticed the mountain in front of his house was gone and part of the walkway was gone...i think it's something with the update and not tnt...unless I am talking about a different area.

Also tnt will destroy roughly 75% of blocks leaving 25% for pick up. If you place a block of tnt 3 blocks in stone it will only blast a 3x3x7 hole. Perfect for subways. Now if it encounters soft materials (dirt, sand, gravel, air) all bets are off on the blast radius.