I don't know if you've ever heard of "electric erasers", but the refills are 7 in. pencil erasers that come in a box of 10 or 12, and I've seen these as cheap as $4.79. Cut these in half, and you'll have 20-24 pieces at 3.5 in. each to work with.

Another idea you might consider is using the glue sticks for hot glue guns. They're pretty cheap, pliable, and paintable too. Good luck!