If you transplant right after a watering its very messy, and if you do it when the soils dry it falls apart. I suggest transplanting halfway between waterings, and the root mass will stay in tact nicely, making it much easier on you and the plant.

You got the right idea about cutting down the side of the cup. Cut off the bottom off too and the cup will slip right out. I believe I read somewhere that syrofoam makes a poor growing container... I forget why... no big deal, but just for next time.