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power attack improves the damage dealt on melee attacks.
A grapple restrains an arm.
A monk can be grappled, and still use flurry of blows. With power attack even :P
Using the damage option from being in control of a grapple, you deal damage equal to your unarmed strike, a natural attack, or an attack make with armor spikes or a light or one-handed weapon. If you power attack, you will increase the damage done by those attack types. However, the penalty applies to your grapple check and thus might not be the best option.

Eben TheQuiet |

While there is no "attack" roll, there is a CMB roll, so me and my group have allowed it. The flavor example being the grappler becoming slightly more reckless in order to snap that bone or wrench that joint. The risk/reward is still there on the Combat Maneuver check, so we decided it was kosher.
Now, this was a decision we came to without looking for an official answer... so sorry if you wanted an official answer.

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Well, the damage options listed are derived specifically from melee attack types. You can activate power attack, and any time you hit with those attacks, you add the bonus damage from power attack. Since the damage you deal is equal to the damage you deal from those attacks, and power attack increases the damage you deal from those attacks, the result ends up being the same.