Prepare pudding as directed on package using the 1 1/2 cups milk. Refrigerate while preparing blueberry mixture.
Meanwhile, in medium saucepan, combine sugar, cornstarch and nutmeg; mix well. Add water and 1 cup of the blueberries; mix well. Bring to a boil. Reduce heat to medium-low; simmer 5 minutes or until slightly thickened, stirring occasionally. Refrigerate 10 minutes or until slightly cooled.
Stir in remaining 1 cup blueberries. Refrigerate at least 30 minutes or until cold.
In 4 parfait glasses or dessert dishes, layer half each of cake cubes, pudding and blueberry mixture. Repeat layers. Top with whipped topping. Store in refrigerator.