What it shows:
When sand in a balloon, just as atoms in a lattice, are close packed, they occupy the least possible volume. Any deformation, even compression, deforms this close-packed arrangement causing an increase in volume.
How it works:
The balloon is filled with sand, and black ink added allowed to percolate down and fill the air gaps. A capillary tube sticking out of the balloon indicates the ink level. When the balloon is squeezed the sand, which had settled down to a closely packed arrangement, is dislocated. Larger gaps open between the grains which fill with ink, and the ink level in the capillary drops.
Setting it up:
Take any normal round balloon and loosen it by blowing it up a few times. Load it as full of sand as you can using a funnel, then add the ink similarly. Give it time to drain; you'll know when its saturated when the ink level doesn't drop. If your ink is too soupy, it can be watered down. The capillary tube should be about 20cm long with a 1 - 2mm bore. Stick the tube about half way into the balloon, and let it sit to reach equilibrium. Camera setup with macro lens to show the ink level against a white backdrop.
What a mess! Balloons burst, sand and ink everywhere. Aesthetically gruesome, but it does work. Very counter-intuitive.