Ingame Terrain Editing

Hello,
I'm thinking of creating a sort of puzzle game where the player is able to alter the terran ( like in this video: http://www.youtube.com/watch?v=9VenodrPzMQ)
The player should be able to both lift up or let down the terrain. During the game some explosive objects should also create some holes in the terrain.

Is this possible ? Thanks

 

No one ? :/

 

here's one,
http://answers.unity3d.com/questions/473812/real-time-terrain-deformation-after-explosion.html

..or try some voxel/marching cube terrains?

 

Ok mate this is cool! Thank You!
This explain how to create holes in the terrain, but now how can I lift up or let down the terrain ?

Many thanks for the help