I guess I missed some nuance, but isn't this simple? Use attributes/options only for the size/type, like cedar bark dust vs. fir nuggets. Then use the quantity field to specify the volume in terms of cubic yards. The Custom Price contribution http://www.ubercart.org/contrib/2289 can be used to set a price per cubic yard based on the quantity (e.g. lower price/cu yard for high volume, larger price for small volume...) and the Product Minimum/Product Maximum contributions can limit the quantities (e.g. can't fit more than 7.5 cu yards/1 unit on the truck!).
Or if you want to continue on the way you're going, that's OK too. To answer your questions:
1. The ability to keep the base price from being displayed when the product is listed (since it will always be $0 in this case).
2. The ability for the attribute price to replace the base price, not augment it.
I've done this on one of my sites with a tiny bit of jQuery. You can clear out the display price with one line of jQuery on page load (or better yet, change your node-product template to not print the display price at all, just the empty <div>), and use one more line of jQuery to set the contents of the display price <div> to be the attribute option price when the attribute select box fires a change().
In the catalog, you can theme the page so the price doesn't show or you can insert text saying something to the effect of "starting at $x.xx per cubic yard" where $x.xx is your base price. The product page is where they will see the exact numbers.
Joined: 11/05/2007