I would say worrying about the flammable nature of materials is all well and good, but I'd sooner put the emphasis on avoiding the actual fire to begin with!

Don't use cheap materials, and by that I mean (if I were you anyway) pass over the super low priced magnetic ballast and generic HID bulb and get yourself a digital ballast and a name brand bulb. In addition to running better and giving you more bulb performance for your money, digital ballasts won't supply current to the fixture and bulb if it detects somethings wrong with it. I hear they are more sensitive to juice fluctuations and outages, but I've never had a problem with my 400w Lumatek. Granted, I haven't used it that much, but I live in an area with absolutely crappy power service and rough weather. The UPS devices I have guarding my computers switch on multiple times a day, I know this because the APC software that came with them keeps logs for my review!

A homemade reflector sounds pretty risky - HIDs get HOT. Get yourself a basic air cooled hood, doesn't have to be a nifty cool tube. More money than simple reflectors or a DIY version, sure, but it is obviously magnitudes cheaper than having to procure a new house. Peace of mind is a good thing.

Good luck!