I would use a laserjet printer and print the letters on the paper then tear my paper to fit my blocks.
Do you mean just use the scrapbook paper that I'm going to use for the decoupaging (sp?) and just feed that into the printer instead of regular paper? Hmmm.. interesting!
If you could find somebody with a Cricut or a Silouhette, they could make it for you in a matter of minutes. Otherwise I would contact somebody on ebay to make it for you. They could create a special listing just for you. It should be really cheap.