I am making tombstones for my Zombie Ball in August.
I bought a huge piece of the 4'x8' 2-inch thick insulation foam from Home Depot. I was going to use a 40% off coupon from one of the craft stores, but even then, it was just cheaper to buy the 4'x8' piece for $18.
Anyways...I tried my hand at a few different methods.
The first time, I created my tombstone shapes and text in Adobe Illustrator, and printed them out. I then used my craft projector to blow them up onto the foam, and then traced them with a pen. Be sure you pull off the plastic sheets from the styrofoam before you begin 'engraving' your letters. I used my wire Styro Cutter to cut them out, and used a combination of the Styro Cutter and Wood Burner tool to 'engrave' the letters. After that I painted my 'engravings' with black acrylic paint. I sprayed them with stone-finish spray paint, which surprisingly did not eat away the foam. However, this paint is NOT cheap (even with the 40% off coupon) so using it on the bare foam soaked up a lot of it, and was quite wasteful.
My next attempt, I used a yardstick to draw straight lines on the foam, and then used the projector to get the general shape and to make sure it was symetrical. Instead of projecting the letters, I printed them out the exact size I needed, and then taped the paper to the foam tombstone. I used a sharp pencil to trace over each letter on the paper, and when I was finished, I removed the paper and retraced the letters on the foam. Worked good, but it was a little hard to see the lines on certain letters. I used the Styro Cutter for the finer lines and cursive writing, and the Wood Burning tool for the regular letters and designs.
The third try, I did the same method as the second time, but used an X-Acto blade to actually cut through the paper and into the foam. This method was by far the quickest and easiest for me.
I continued to paint the 'engravings' black, but to save on the stone-finish paint, I painted the tombstones grey with acrylic paint. I couldn't find a large jar of it, so I bought an inexpensive white acrylic paint and tinted it with some black. I painted the tombstones with the grey, and then sprayed just the front of the tombstones with the stone-finish paint.
I am out of state at the moment, but when I return home, I'll probably add some black streaks to the tombstones, as well as a little bit of moss. I'll be sure to add some photos too.
So far, they look really, really good.
A Dremel probably would work better, but being that I didn't want little bits of foam everywhere, I decided to go with melting the letters.
I hope this info can be of help to someone!