Nov 4th 2008 7:52PM Blink fails on "flat" terrain for the same reason you can't blink off a cliff, the spell stops you at the edge of a terain piece. The positive is this keeps you from appearing in mid-air if you use the spell near a real cliff.
The downside is that areas like the infamous tunnel in WSG, while appearing flat, are actually built as two different pieces of the world (the tunnel entrance, and midfield). When you try to blink into the tunnel, the blink spell thinks you are attempting to blink off a "cliff," and stops you at the invisible edge. Combined with lag, this gives the appearance of blinking nowhere or backwards.
I highly doubt the problem will ever be fixed at this point, as they'd have to rework the world architecture and/or pathing models of the entire game. Best bet is jump before blinking (this helps prevent getting stuck on the small rocks), and experience will tell you when to wait a additional second or two before casting the spell.