Having participated in the removal of "closed-cell foam" from a mast on a friend's boat I can tell you first hand it is water-friendly. It STUNK! It was the standard Home Depot keep-your-pipes-from-freezing-sleeves-slit-down-the-sides application and it was covered with mold. Maybe it isn't a true sponge but it gave water an excuse to hang around. It was especially over-grown in the core around the wire. It had been in there for years and water had probably migrated down from the exit holes for the wires to the VHF antenna and the anchor light as well as our humid climate here on the Chesapeake. That might not be such a problem on the West coast so it might work for you but the wire-tie rig is soooo easy and the wraps are handy for other things on the boat too.

On the subject of getting wire through the deck, Blue Sea Systems has a product called a CableClam

http://www.bluesea.com/product.asp?Product_id=24908

that allows for passing a cable with a connector on it through the deck and then recreating a water tight seal. It appears they expect the application/use to be seasonal unstepping of the mast rather than regular per/trip use. I think their instructions could be a little clearer but the product has worked for me so far. Water tight and easy to install. You might take a look at it as part of your solution.