Initially the force of the spring on the lower block must be $m g$ upward where $m$ is the mass of the identical blocks. So, initially, the force of the spring on the upper block must also be $m g$ , but now the force points downward. Therefore, when the string breaks, the upper block will feel a force of $2 m g$ downward, one $m g$ due to the spring and one $mg$ due to gravity. Therefore, the acceleration of the upper block will be $\boxed{2g}$ downward. Therefore, answer (E) is correct.

Solution to 2001 Problem 72