I would think soluble paper would work. I can see where the stitch wouldn't be strong enough for tearing.

I hand pieced a Mariner Compass, which is usually done by paper piecing
http://www.quiltingboard.com/picture...s-t159809.html

I copied the design on freezer paper, (maybe you could print out multiple copies on the freezer paper) and the cut out all the pieces. I iron them on to the wrong side of my fabric and cut my fabric out leaving a generous 1/4 " seam allowance. I then basted around all my pieces like you would for English paper piecing and them whip stitched the pieces together. (the flying geese in my design were fun :p).
It was a bit fiddly, especially the preperation but I love the way it turn out.

if its water soluble watch out for humidity+spills

You can do it on a lightweight nonfusible interfacing that will stay in the block. The Peace Quilt with cranes can be done by hand this way. The design is transferred to the interfacing like you would do for fabric and then piece away. (http://www.margaretrolfe.com/details.cfm?ID=7)

I am using paper since I have a machine, but the hand instructions are included with the pattern and are as simple as I wrote above.

I would go for it. I hand pieced a whole ocean wave quilt once. Loved just having to stitch on the line. Only supplies I needed to take with me were needle, thread, two pins, and scissors and of course the marked pieces.

IMHO I think that it would be hard to hold the fabric still on the paper while trying to hand piece. I also think it would make your hand tire more quickly.

Suzy