Ken,
I much prefer using foam over balsa and cork primarily because they last longer and float better. You can get a set of whole punches for about 7-10 bucks by looking around stores that sell lots of tools (Harbor Freight is where i got mine). On my set of whole punches I took the three largest bits and had them milled where they would fit into my drill. I also use a Dremel tool to shape the piece of foam once it has been drilled.

Good luck,
Greg