I am repairing a 1984 Macgregor 25 and in my searches for styrofoam, I came across spray in flotation foam similar to the insulation foam that you use in houses. I am considering using it in place of the blocks since it will be able to fill in spaces that the blocks can't. If the foam actually does work to keep it afloat, then this will allow me to be able to use some of the space that the blocks take up for additional storage and stilll have foam around the area. Just a thought at this point.
I also have experience with this. IF it is immersed in water, it will hold water. (oil is even worse).
(fwiw, I had a 15 yr old skiff with the 2 part foam, and it was soaked with oil and water... made the boat heavy...)
if you can put it in a garbage bag, then it will not soak up water.
-it takes a while for it to soak up water and oil, and if you have a skin that helps. (ie cutting it after it sets up exposes the sponge part).
closed cell foam FTW!
That said, I used some in the laz top (roof), and in some behind the bow eye, where water will not sit.
as long as its not in the bilge it should not absorb water