Thanks all. I used blobs played with the settings and came up with this
(http://www.youtube.com/watch?v=J_GUjGDknvI). The scene has a heat source (The
Orange sphere near the left top of the cube)  The only problem I see now is the
size of the molten droplets.

What I thought of doing is, flattening the droplet once it melts by scaling. I
think scaling it in the direction perpendicular to the normal at the point the
droplet is on the remaining solid would do the trick. But I am not able to find
a way to calculate the normal of a blob at a given point on its surface. Can
someone please suggest how to do that? Or is there any other way apart from what
I thought?

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