The idea itself isn´t that bad, but the geometry isn´t good enough to hold the form of the holes.Therefore you get these weird lumpy holes. Like said many times before ADD MORE GEO :P I made an example which does it´s job: If you have max 2010(or higher) you can take a look at it directly:…
Try adding more loops like this (the number of loops you can add is left to you, I just drew the general idea. Also forgive the horrible paintover. :P) That should fix it, I think. As perna says, it's hi-poly sub-d modelling, there's no reason to not add a few loops here and there for better smoothing at the expense of…