I've never done anything quite that elaborate. My best guess would be to make a full body mold with plaster gauze, and to build your costume up over that. Unless you're a wizard with a sewing machine and can pattern at a glance I suspect that may be a key factor in doing this.
As far as 'sculpting' or rather carving foam, I can offer a little knowledge. You can basically use some of that dense seat cushion foam that they sell in fabric stores.... you can also shape and carve it with *very* sharp tools. Theres a great episode of 'How it's Made" that shows how to do this... it's Episode 72: 'Traditional Bows/Coffee Machines/Mascots/Hammocks'... I can't find it online yet though....
As far as the stilts go, you might want to look into drywall stilts..... construction workers use them when putting up drywall on ceilings. They should sell them in hardware stores, and they're adjustable in size I believe. Think of them as very high heels. :mrgreen: