I found a paper that works perfectly with this method today. HP Glossy Presentation Paper. It looks and feels like magazine pages. It's very thin and very glossy.
I don't have a laser printer so I took a USB drive with some template pdf's to my local Office Depot and asked them to print it on a glossy paper stock. They only charged me $.11 per page. I had 5 copies of each made so I don't have to go back anytime soon.
The paper released very easily and quickly and didn't lift the toner at all just running it under hot water in the sink for about 30 seconds.
I'm hooked now, no stencil can match the accuracy.
On another note, be wary of using an iron with a coated surface with this method. The edges of a hacksaw blade, even the factory edges, will scratch the coating.