Pink insulation foam.
If you're planning on making fists out of anything, that's your best bet. You can get it in home renovation stores like the Home Depot (where I get mine). You can cut it up, carve it and sand it down before coating it with a sealer such as Modge Podge. Definitely seal it with several layers of the stuff, because just the insulation foam itself will snap if you're too rough with it. Here's a reference pic of the fist I made for a costume using the same stuff:
Gorilla Glue is great for getting the pieces to stuck together, but make sure you sand the surface you're gluing--doesn't work well with smooth surfaces.