You can get the plaster molds for dungeons at
http://www.hirstarts.com
My group scratch builds a lot of scenery stuff, as well as using Master-Maze and Hirst Arts molds. (I have the cavern set, the basic room set, and Wicked Additions II). I also have several armor-cast pieces (cathedral walls, fieldstone walls, tombstones, etc). Three members of my group are really into painting miniatures (me included!) and one member actually has a sculpture degree.
Do people really use this stuff? Yes! Well, we do. Check out
http://www.arrakis.homeip.net/gallery/
We don't assemble full dungeons, but rather 'set the scene' area by area, indoors and outdoors. Some of the more memorable battles have been aboard flying airships (we used model boats), flaming temples, and atop icy peaks.
Scratch Building is easy! You don't have to buy expensive dungeon blocks. Get a set of kids wooden blocks and some plastic wedding cake collumns- suddenly you've got cover for an ambush and three dimensions to play around in.
The closer we get to Halloween, the better things will be for scratch building, too! Stock up on fake spiderwebs, plastic monsters, little skeleton thingies and the like.