Hi PCX,
Without a doubt the safest route would of course be to call a vet....
If it has been more than one day it's quite possible that the sponge has already started disintegrating in the dog's stomach....whether it will break down completely (and pass completely) is the question. A bowel obstruction is a possibility here and that is extremely serious. If the dog has not yet pooped the situation REMAINS serious.
If the dog has been pooping...then it's quite possible that the sponge is passing in pieces you can't see....and thus the problem
might actually be over.
The thing is, is that this is just speculation and we don't know for sure....so because of this a call to a vet is my best advice.
Here is someone that posted an IDENTICAL problem and here's a vet's answer in that case
http://www.pets.ca/forum/showthread.php?t=7653
Here's more info on inducing vomiting and when you should do it. (most times you should not)
http://healthypets.mercola.com/sites...g-in-pets.aspx
Hope this helps and hope others may have some input.
Good luck