I get my PVC from Menards. An eight-foot 1x4 costs about $20, and you can get a lot of baits out of one board. It has a shell of some sort on the outside of the board, but I just carve that off of each lure blank.
While in theory PVC doesn't need any sealer prior to paint, in practice I find that it works much better if you coat it with epoxy before painting. It is possible to sand PVC smooth enough to paint without epoxying, but it takes a lot of effort and then you still have to worry about the PVC expanding when you heat set your paint. PVC expands when heated, and that can ruin your paint job (been there done that :-X). Epoxy is the best way I've found to protect the PVC from heat and get a smooth surface to paint on.
I know that may seem like it defeats the purpose of using PVC, but it doesn't at all. The sealing epoxy is only used to provide a smooth surface to paint on; it's not actually protecting the PVC from water seepage. With PVC baits, a fish can chew right through the finish and the bait will still retain it's structural integrity. Not only that but the bait won't swell and crack the finish due to water absorption, so the finish will last longer.
I hope that made sense...
Ben