Well - I'm a boatbuilder so I can submit some information on foam, glass, polyester etc.
Unfortunately, there is no cheap way out of the foam problem if you want a durable, water resistant and lightweight construction. Sandwich construction, i.e. core material with glass around, is used extensively in boat building. However, the foams, honeycomb, balsa or whatever, need to be of very high quality. If you are building a plug, you can get away with cheaper materials that will give you something with low structural integrity (like what you are trying now).
I'm situated in Europe so the products available here are not always the same as in the Americas. A good source of information and products is DIAB:
Americas Home Page
For an application like yours, you will be looking at low density foam. I would not go below 40 kg/m3. Divinycell is one of the best products for this and it is very easy to form and grind to desired shape. Cheap it isn't but you will not use much anyway. If you can locate a boatbuilder, he can supply you with everything you need, including information. Performance boat forums are probably a better place to source information on building technique. There should be plenty of project threads with pictures etc. if you look around.