I've been using extruded polystyrene to make hides for my reptiles for a while now. I carve the stuff and then use a non toxic paint to make it look nice and make it easy to clean. I recently took a 40 gallon breeder tank and used 3/4" polystyrene panels to make the tank covered on 3 sides and I even have a panel on top right under the screen to keep the humidity in. So far it is working well. There is a guy on youtube by the name of reptilecreation that shows you how to make some of this stuff. My hatchling BP really loves the cave system I made her out of the stuff. She basically has a cold and warm hide connected by a tunnel with a escape hatch in the middle of the tunnel on top. She feels real secure in there.
So far I haven't noticed any ill effects. I would just make sure you take your time and let the paint on the polystyrene dry completely (use non-toxic paint) before you put it in the enclosure.