Hi there,
I've done a few experiments making sandbags for a 1/35 scale model so I suppose the principal will be the same only smaller. I used a big tub of my kids modelling clay which was bought from a childrens toy shop. You get absolutely loads and should easily do 500 bags. The method I used was the same as mentioned above, rolling out a long snake then cutting it up to the size you want, then tweaking the ends to make them more like bags. I'd suggest building the feature as you go along as you can mould the bags into each other as in real life. I had big gaps in mine which didn't look to good , but i reckon you could fill these quite easily. Another thing I've heard but never attempted as I didn't have any at the time , was to use a piece of muslim cloth and gently press down on the damp sandbag hopefully leaving it with an impression of sacking.
I don't know if you have children, but I got loads of bonus points off the wife for keeping mine amused for hours by getting them to roll out the clay for me and to cut it up into the desired size.
Take care, Rich
...this is it folks...over the top!