Nope, shadowing doesn't work like that in Java (at least at the block level, for instance within a for loop), and the i from the outer level is considered local for the whole outer for block, blocking any redeclaration until the function call is up.  Shadowing is allowed inside functions, where a locally declared variable in a function shadows a class member.  This is generally considered a bad thing, since it can totally mess with your head when you think you're accessing the class variable but it's actually been shadowed a hundred lines earlier in the file you're working on.  See http://www.leepoint.net/notes-java/data/variables/60shadow-variables.html for some examples.

In any case, my advice is to steer clear of this type of thing except for the most trivial of cases - even in a language that would allow nested i loops (are there any common ones?  I know Python has some bizarre scoping, but I don't think it is that weird), it's just not a good idea.  If you needed to reference the outer i, you wouldn't be able to at all (at least with class variable shadowing you can always tack on this to access the class variable instead of the local one), which is not ideal.