I'm no arduino developer, by any stretch of the imagination (I do vb.net and the very rare C# stuff), but wouldn't you want to:
#define powerup_type 2
With 1 being to grow the paddle width, and 2 being to shrink it (as an example). Reading through the source, this should work as well:
byte paddle_powerup = 0;
Also, something along the lines of
boolean drop_powerup = false;
When the game first starts, then I'd hook into the code where it checks which brick has been hit, pick a random number between (as a test) 1 and 10, if it's below 7, no powerup drops, if it's 8-10, drop a powerup, randomly between the two current choices, from the brick that's just been hit.
Something like this might work:
That should (ha ha) draw a lowercase 'w' that's white on a black background at normal size. Provided you find the correct x and y position of the current brick being hit.
Then you'd add code that if the 'w' hits the paddle, you add a width to the paddle by changing the value of paddle_powerup.
Happy to be told otherwise, I'm much more used to the IDE telling me what I need to input as options, rather than guessing an hoping for the best).