I'm glad the mod convinced you to keep your P5's. I remember being so disappointed with mine when I first got them; but at that time there were no forum threads containing anything useful about improving them - just a few posts saying how much people didn't like them!
My own view is that the drivers themselves produce excellent sound quality; its the bit between them and your ears that fouls up the musical accuracy. Interestingly there seem to be a second version of the ear cushions (according to some other photos posted by other users) where the foam does not obstruct the drivers.
Regarding the foam and how much to trim, I would not remove more than is necessary. What we're aiming to do is create a 'seal' around the driver that forms a 'tunnel' straight to your ear. If you remove too much foam, the 'tunnel' will become larger than the driver and (in laymen's terms) you could create echoes within the tunnel. That was my theory as to why the upper cavity needs to be filled in with something.
On that score, I found that make-up removal pads are not the best solution.
I took a pair of foam hearing protection ear buds and trimmed the sides to make oblong blocks (like bricks almost). These are the best material I've used so far; the bass is so beautifully tight and realistic now - the bass pedal of a drum kit sounds really clear for example.
I use these ear buds at work so it was easy for me to grab a pair to experiment with. If you can't get hold of some, I would assume eBay have them. Totally worth it!
I wouldn't worry too much about the cable upgrade to be honest; its very fiddly - potentially a lot of work for only a small improvement.
Spread the word - the P5's ARE as good as they were marketed to be! They just need a simple mod to undo a poor designers over-sight!