With Hubble Space Telescope Wide-Field Planetary Camera 2 observations of the Cygnus Loop supernova remnant, we examine the interaction of an interstellar cloud with the blast wave on physical scales of 10^15 cm. The shock front is distorted, revealing both edge-on and face-on views of filaments and diffuse emission, similar to those observed on larger scales at lower resolution. We identify individual shocks in the cloud of density n~15 cm^-3 having velocity v_s~170 km/s. We also find the morphologically unusual diffuse Balmer-dominated emission of faster shocks in a lower-density region. The obstacle diffracts these shocks, so they propagate at oblique angles with respect to the primary blast wave. The intricate network of diffuse and filamentary H alpha emission arises during the early stage of interaction between the cloud and blast wave, demonstrating that complex shock propagation and emission morphology occur before the onset of instabilities that destroy clouds completely.