Sorry guys, I didn't know this thread was still going.
I cut the vents using a dremel tool. I started by cutting the middle out, then getting closer to the edge with every sweep. I still haven't sanded and painted it, but unless you stick your head in the hood you really can't tell. I took the insulation completely off for now, because the push pins that held it on were old and broke. As far as water getting in, there's been none. I've driven in the rain numerous times since I cut the vents out, and I've had no problems. The vents are set enough in the hood that even when left out in the rain very very little gets in. Eventually I plan on making something to go behind the vents that I can put on when it's wet out. I'll let you guys know if I do experience any problems, but I doubt it. I'll take some pictures tomorrow if anyone still wants to see them.

 

I do!!!

 

I wanna see too.