Can cats absorb its babies whilst they are still inside the cat?

I'm sure I've heard or read someone say that cats can loose there kittens and without giving birth to them absorb them whilst they are still in the catrs womb. I'm wondering if this is true as we thought our cat was pregnant and felt little lumps inside her (about the size of a 3-4week along kitten would be), but then her belly went really strange and when I felt for the kittens her belly was making squishy sounds, and after a few days I cannot feel anything. She hasn't had the kittens as we don't have the gory stuff everywere, but if a cat cannot do this what may have happened to her kittens?