Actually the waterproofing should have been done before you put anything else in it. You can use marine varnish or fiberglass for waterproofing but you have to let is cure for several days so the fumes don't kill your MHD. I'm not sure how long the plastic would last if your dragons digs any at all, and most do. Also, moisture from misting and condensation would most likey get between the plastic and the wood.
I prefer the shredded coir fiber that comes in compressed blocks like bed-a-beast. It is about the consistancy of ground peat.
Here's the blurb from my caresheet:
"There are several good types of bedding that are good for this setup. The shredded coconut bedding is excellent as it holds the moisture well without getting muddy or overly soggy. This is what I have had the best results with. Some keepers have used bark with good results, but this is more difficult for the MHDs to dig in. You can also use potting soil that is free of perlite, foam pellets, and fertilizer, but this will produce a lot of mud if you keep it too wet. MHDs love to dig and these types of soil help increase the humidity."
In my large viv I get tired of the muck the dragons track into the large water pan so I use the coir chips, also come in a compressed brick but are more like sugar cube size chunks, in the end I have the water in. Its an easy thing to remove the chucks from the pool and then I only have to do my routine changes and cleaning instead of dumping out mud every day.
Good luck with the waterproofing and share photos if you can when you're finished! We need some more activity on this forum.
Marcia