With one character I mined away the starting sand block, and then I switched characters, when that new 2nd character logged on, the previously mined away sand block was restored. The world did not revert however, because with the first character I put the extra sand block in a corner and put a cactus on it and also in an opposing corner. The new 2nd character saw the extra sand block with the cactus on top and the opposing corner cactus.

Use version 0.4.1 as 0.4 probably won't work.

Should be fixed in the next version. Let me know if it works.
You have to create a new world due to the way island spawning works.