There should be a standard method, but I've been on this forum a long time and went through the whole application process and I never heard of any school stating what they actually mean by "Major GPA". As you guys noted, there are plenty of reasonable things it could mean, the most restrictive being physics department classes only, and the most liberal being every course officially required for you to graduate with your physics major degree... thus things like English and Language would end up in there too.
I'd imagine almost all applicants are confused by this question every year, so I'm glad there's finally a thread with its name...
For everyone in this boat, you can just use whatever interpretation of "Major GPA" makes it the highest. Seriously. It's the school's own fault for not saying that they mean. The schools aren't going to check your arithmetic or they wouldn't have asked for the number in the first place. Even if they did and came up with a number 0.02 lower, you couldn't possibly get in trouble because any of the interpretations discussed are reasonable.
If you have two majors in math and physics, do the math classes get counted in the "major" too? I always wondered that... and that was my main incentive for trying to keep a 4.0 and not have to worry about it. But let's just say if I got a B in a physics class, my "major GPA" would have included math and physics, and if I got a B in a math class, only physics classes would've been counted
As for HappyQuark, your plan to only count PHYS courses sounds fine and that may be what some schools expect. But IMO it doesn't make sense for courses like PDE's and Calc 3 to not count, especially since they'll be more useful in your physics career than many of the specific physics classes you took. For instance, in plasma we've barely used any quantum, optics or pure non-stat-mech thermo, but the stuff I learned in complex variables has shown up everywhere. So anyway, the point of this is, don't hesitate to take advantage of the ambiguity of "major GPA".