I took a book out from my local library about 10 years ago that was written by one of the guys who recovered Glacier Girl. The book described the various attempts to retrieve the aircraft, with all the highlights and pitfalls involved in the operation. Best part was that it was full of coloured photos of the recovery process. I can't recall the name of the book but undoubtedly, the same photos have been published elsewhere by now and may even be available on the internet.
As I recall, after the aircraft was located, the recovery was achieved by sinking a shaft through the glacier using hot water and/or steam to melt the ice, with the resultant water being pumped out. When the aircraft was reached, the same technique was used to hollow out a cave around the airframe that was spacious enough to dismantle it, then send the components up the shaft to the surface. The walls of the shaft and cave were not jagged at all - they were very smooth ice. Try holding a cube of ice under a thin stream of hot water and you'll see the result.
That's the background; as for making the ice, I can't help because I've never tried to replicate ice. The suggestion of hollowing out a chunk of styrofoam sounds like the best method to me though. Perhaps you can paint it white (a tinge of blue?) then build up a few coats of clear gloss artists' medium. Remember to only use water-based paints though, as any solvent based product will eat away the sytrofoam. I can't remember the photos in enough detail to confirm if any ice 'stalactites' existed in the cavern, but it's quite feasible thet there would be a few.
Hope these thoughts help. Should be a good looking diorama; it will certainly be different!!!