Steve I would disagree with you on the point that the bare wire in 10/2wg UF cable is considered an insulated conductor. Article 200 makes it quite clear that a wire of this gauge used as a neutral must be colored white or grey the entire length and the bare conductor don't get it. As for the xformer approach that could work. Under the '05 NEC you can still run a feeder to a "Structure" and not include a neutral and an EGC but under the '08 that would be an issue. So depending on your definition of a "Structure" his only choice is a xformer.
