IndyPendant said:
Karinsdad has it right. --Almost. The two statements for the feat are completely independent. Therefore, you have:
1) When wielding a one-handed exotic weapon two-handed, you deal 2xStr damage instead of 1.5xStr. No one is disputing this.
2) If you have Power Attack, the one handed exotic weapon is treated as two-handed for the purposes of Power Attack bonus damage only. --Not for all purposes, as Karinsdad is (accidentally, I believe) implying, but only for Power Attack. So when wielded one-handed, the weapon deals Strx1.0 damage and does not gain the two-handed weapon +4 bonus on disarm attempts--but it does Power Attack at 2-for-1.
This is the literal RAW of the paragraph.
Actually, this is not the literal RAW.
If the sentence said "If he has the Power Attack feat, he treats the weapon as two-handed for purposes of determining his bonus on Power Attack damage.", then you interpretation would be correct.
However, it instead states:
If he has the Power Attack feat, he treats the weapon as two-handed for purposes of determining his bonus on damage rolls.
I emphasize the word rolls here because rolls have nothing to do with "just power attack damage".
Damage rolls have to do with all damage. There is no explicit listing of Power Attack only, hence, it must mean all damage.
Literally, the prerequisite could be anything: "If he has green eyes, he treats the weapon as two-handed for purposes of determining his bonus on damage rolls."
Nothing in this text states that this is PA only. It states that if the "if statement" is met, then the rest of the statement is true.
The only thing the rest of the statement does is treat the weapon as two handed for determining damage. That is the literal RAW.
Hence, treat the weapon as being used two handed or as I originally stated:
UB for a Bastard Sword would be: D10 + 2 * Strength two handed
UB with Power Attack feat would be: D10 + 2 * Strength one handed
UB using Power Attack feat would be: D10 + 2 * Strength + 2 * PA one handed