I just finished looking at some of the works by Ron Mueck. They are very large and very intense. I assume you are looking to do similar things but use a different medium. That means we can rule out silicone, resins, and fiberglass.
If you work with paper as a base you are most likely going to get shrinkage. The process of drying from whatever you mix it with will have the individual fibers contract. As I mentioned before there is a medium called paper clay which is a mixture of both that may not shrink as much. I have only been told about paper clay and have no experience with it.
What I know first hand only applies to clay and precious metal clay. The first you have ruled out and the second is way too pricey. I have seen people work polymer clay and I get the feeling it does not shrink too much when put in the oven at 160F. It however has some limiting strength issues. I just recently used some over night drying clay like stuff. It sort of felt like working with foam. I know there is stuff you make for children using borax and glue that can be sculpted. You might consider trying paper, borax, and white glue.
I might be tempted to carve away at that foam they have in the building supply store that you use to fill in the cracks.
Those are my ideas for now, but let me ponder more.
In any case the chemists here may know of some new stuff being made that might fill the bill.