Current status: I've got a linear and angular physics processing library, with a working spring which I'll be using to connect the blocks, and I'm currently tunning a dampener.
One thing I'll say is, last time I attempted this, I tried to develop all the matrix math by myself - the result being more bugs than I cared to count, and ending up quitting. This time I'm just referenced Microsoft.DirectX, and I'm using all their 3d math stuff. It's amazing how much easier this is :)
Oh, yeah, the project is in VB .Net, the library on 2003 and the test projects in VB .Net 2005 (will probably migrate the library to 2005 later on, when it gets shipped.)
first screen shot - this is a non background clearing (I could have called it path showing :)) drawing of two blocks linked by a spring and dampener, where the second block is being pulled upwards by an invisible force, and the first one is fixed on the center - the color varies with time.