Thanks for the warning Jim. It seems to be doing just fine.
However, the foam really is getting mashed up just from handling it. I'm thinking I might just remove it once I'm close to done.
I did some more work on the grill block last night. It got another coat of bondo and its looking pretty good. After knocking off all the edges and obvious high spots with a random orbit sander I applied a guide coat. All a guide coat really is is spraying the bondo lightly with some spray paint. Then, you take a board sander (long flat sanding block) or in my case my drywall sanding block and go over the grill block. You'll sand off all the high spots leaving the spray paint on the low spots. You need to keep sanding until all of the spray paint is gone, or you decide to put another coat of bondo over it.
Here is what it looks like after we've done a lot more sanding. The left side still needs more sanding, but the right side is looking very good. They both need some filler around the edges though.
The darker patches you see here are fiberglass, not the guide coat.