I've used Elmer's for masking.
Here, I dyed the Dead bear first, then masked to do the background.

Masked the Stones logo to do this background, the white areas were covered in glue.

Here's a pic of the glue after it's dried, before the dye:

The key is to let the glue dry completely -- easy to tell, the glue becomes transparent when done(see the pic above), and also let it dry again AFTER dyeing before trying to remove. I panicked the first time, tried to wipe it off and ended up with a big goopy mess. Just sat it in front of the fan for a few minutes and it was fine, easy to remove.
Elmer's is great though -- easy to work with, cheap, easy to find, and it WORKS!