Ken, I'd say as the sugar cube becomes saturated with coffee, the total volume in the cup decreases, since there are pockets of air in the sugar cube being displaced by the coffee. Once the point of saturation is reached, My guess is the volume decrease yet again when the sugar dissolves out of it's solid form into a liquid solution. I'm willing to bet the coffee-water-sugar solution can pack more molecules in a tighter space than the crystallized sugar cube.

I have no proof of this.