Alright, here we go! I've got a fairly polished proof of concept up on Github:
https://github.com/PeterBorah/ethereum-powerballInstructions for use are in the readme.
I've got a decent number of automated tests for it. Obviously any script that gets banged out in an afternoon is likely to have some residual bugs, but hopefully I've tested it sufficiently that there won't be any major problems.
It hits almost all of the points of the spec, and tries to be very close to the way Powerball works. (Powerball has some weird features, like every prize except the jackpot being fixed, and pretty complex rules for how the jackpot works.) I went with requiring people to claim the prize, since that's what prophetx requested, but of course that could be easily changed.
There is one small deviation from the spec: the ability to set the number of balls. This turned out to be surprisingly difficult, since Serpent doesn't deal well with not knowing how many values there will be ahead of time. However, you can set the payouts for each prize, and by switching out the RNG you can change how many possible values there are for each ball. And of course it would be very easy to modify the code to use, e.g., four balls instead of five.
If that's a dealbreaker, maybe someone can try to add that support, and split the bounty with me.

Or maybe prophetx will decide it's good enough as is.
Either way, thanks for the interesting challenge!
Best,
Peter
XCP: 1LeygZteCpjBstARoyt3uHgPhV8aJHsBAg
I think the total commitments now are about 106 XCP

I think I will have the folks send their award donations individually to your address, so that we save on fees/times, once the final verification of the code being functional is done. I'll provide an accounting of all the donators when I get back from Miami later today.
yes the prize amounts cannot be the same as powerball since it is unrealistic to use fixed pay outs unless this is being done by a large entity who already has the funds. the payout as i mentioned above should ensure that at least 33% of the tickets get something. does it do that?
The last part I need to give our the award is to have either a known Ethereum dev or a known XCP (Adam, Evan, Robby, BTCDrak, etc) dev to look at this code and give their opinion that it should do what it does.
Or perhaps you can offer a piece of the award to someone who can run it on the testnet network and make a simple webpage for people to test making a lotto and getting/sending tickets, that would be fine as well (although i think that would be too much time/trouble)
oh and thanks for getting this done so quick!