Mark -
Basically what you described is how I'm doing it. I got a lot of experience with shrouds when I built my Vostok (12 of them altogether!) which is why I'm going that route. I doubt they'll look as good as what Sandman can do though.
The Saturn V from the transition on down is identical to the other Saturn V launch vehicles, except the last Saturn V's (Apollo 15, 16, 17 and the Skylab S-V) had no ullage rockets on the 1st/2nd interstage (the Estes kit has 8 ullage rockets on the interstage, the manned S-V's only ever had 4 at first, then none after Apollo 14).
I only mention the ullage rockets because some folks are nitpickers about scale detail like this - but it's next to impossible to remove them from the vacuformed wraps without making a mess of things. If you're entering it in a scale competition it could make a difference though.
Also, the Estes Saturn V has oversized fins which don't look very scale-like, but with enough extra nose weight you should be able to get away with smaller, scale-sized fins. But then you'll need more power, but you're better off with more power anyway, as the recommended D12-3 is barely adequate.
I'll shoot some photos when I start, right now I'm trying to decide between this, my Apogee Saturn 1B, or my bigger Vostok for my next project. Decisions, decisions...