First, the Coast Guard approved foam weighs 2 lbs per cubic foot so it provides 60 lbs of buoyancy per cubic foot. It does not weigh 60 lbs per cubic foot.
I used it in my Brand-X dinghy and I was happy with it.

As you can see, I overfilled it, just as Bubblehead predicted, but this was my first time using it. In subsequent attempts I've come closer. The exact expansion is temperature-controlled so it's important to allow for that. Note that it is always possible to do multiple small pours instead of 1 large one.
The overfill is easily cut with a saw, razor knife, etc., and sanded to the final shape. I actually find it easier to work with than the hardware store insulation sheets in that it's easier to control the shape. But it does make lots and lots of dust that sticks to everything. A respirator, eye protection, clothing that you're willing to dispose of and working outdoors are all absolutely necessary if you use mechanical means (saws, sander, rasp, etc.) to shape the foam.
I find actually mixing and pouring it no problem. At its nominal temperature it makes 1 cubic foot of foam per quart of mix. so the first job is to estimate the target volume. You can get creative with irregular volumes and do it by pouring in beans, packing peanuts, etc. and then seeing how much of a regularly-spaced box that all fills and adjusting your mix amounts. It's usually a 50:50 mix by volume so that's easy. And, best of all, as you mix it, it changes color just before it starts to kick (unlike epoxy).
It does expand very forcefully, that's why in my boat I left the top off the compartment until after the pour. The stuff can expand and break a closed compartment wide open.
The inside of the compartment should be epoxy-saturated and glassed, but with the weave unfilled. The foam will grip that roughness like a bulldog. The epoxy will form an internal water barrier, while the glass makes sure that you have an even minimum layer of epoxy everywhere, as well as providing tensile strength to resist any forces from collisions. If the compartment is entirely filled the foam will provide additional compressive strength in case of collisions.
If the outside of the compartment is also glassed the chances of micro-cracks and rot are vanishingly small. In any case, periodic tap tests (where you tap the hull and listen for changes in the sound of the wood) will let you find rot before it gets out of hand.
Bubblehead is absolutely right in that it has no UV resistance to speak of, but it's also never meant to be used unless it's covered with some kind of durable covering like wood, glass, carbon fiber, etc. so that should never be a problem. Plain paint or varnish is not a suitable covering, it has to be a hard surface.
So that's my 2 cents worth. I still have the boat in the picture and everything's holding up fine 12 years later. I used the foam in the bow and under the stern seats, the 2 places where a collision is most likely. If you use it the way it's meant to be used, I think the stuff is perfectly viable for wooden boats.
Laszlo