Your way looks pretty fast and elegant, using the existing framework functionality with some smart data to take advantage of it.
You could probably extend Form::select() with your own code if you want to have any customized behaviour not outright supported. I know Kohana strongly suggests extending its core classes, that but I haven't played with Kohana3 yet. In Kohana2 you'd do it as seen here. According to this tutorial for Kohana3 you'd do it similarly, but placing your new file in the application/classes folder.
A wild stab at guessing how this would work: create form.php in application/classes and enter:
class Form extends Form_Core {
public static function select() {
/**
* Add the code from http://dev.kohanaframework.org/projects/kohana3-core/repository/revisions/master/entry/classes/kohana/form.php#L252
* and change it slightly to also include a default value when writing out
* the form, or even better via another optional function parameter
*/
}
}