I know most professional aquarium shops use something called Polygem or Smoothon. These are both sculpting clays, but I'm unsure if they require firing or just an outter epoxy.
I would avoid any kind of metal inside of your aquarium. Its bound to rust, and that will cause all kinds of problems.
However, you can use foam as a support during the sculpting process. Just carve a large chunk in the shape and size of the cave, then lay the clay ontop of it. Remove the foam before you place it in the oven.
You also might want to look up the process for making the clay and paint used sustainable in the aquarium. You'll need an epoxy of some sort to keep the paint from dissolving.
HTH
Hmmm Smooth on and Polygem are definitely what the pros use, you're right. It seems a lot more costly, unforgiving, and in depth , though. I just watched a few of the smooth on "how to" videos on their site and it was very interesting.
What I meant, when I said using the metal mesh was to encase the mesh with clay, and then bake it. None of the metal would be exposed to the water, I don't think... but maybe it's too porous? I've seen people use metal mesh for wrapping moss around branches before, so maybe it's okay as long as it's stainless steel? I had imagined that the mesh would be providing the structure before "baking" the clay.
I don't really know much about this whole idea, it was just something I thought of today when I felt like making a cave for my large clown loaches. I thought about using bowls, pvc pipes, tupperware, laundry baskets, etc. covered in silicone and rocks/sand but none of that looks very "real". I was thinking about putting something along part of the back wall of the tank, perhaps where the overflow box protrudes into the tank. A "wall" with some holes the clowns could swim in and out of to escape the larger predator (Mbu puffer) if need be. It needs to be fairly large however, as the largest loach is pushing 11".