What about just appending the 0 as text when necessary? (Also, no need to increment a counter, just set an end point)
Code:
$curYear = floor(date("y"));
$endYear = $curYear + 10;
echo "<option value='' SELECTED>- Select -</option>\n";
while ($curYear < $endYear) {
if ($curYear < 10) {
$displayYear = "0".$curYear;
} else {
$displayYear = $curYear;
}
echo "<option value='".$displayYear."'>".$displayYear."</option>\n";
$curYear ++;
}