DO NOT write that alleles are dominant or recessive. The examiner will most likely take marks off for it. It is traits which are recessive or dominant, not alleles. At the allele level, both alleles are always codominant. Both alleles are always expressed and a protein produced from each. (except in the cases of genomic imprinting or X-inactivation - not important for VCE so don't worry about it.)
It is the function of the proteins produced from the alleles that will determine whether a trait is dominant or recessive.
Most mutations are loss of function. This means exactly that. A mutation has resulted in defective/unusable protein. Whether a trait is dominant or recessive will depend on whether half the amount of protein is enough to give normal function. Usually, half is still enough, and is referred to as haplosufficiency. You are only getting functional protein from one allele, but this is enough for normal function. You have to have two mutant alleles to be affected (i.e. you are getting no functional protein), and this would result in a recessive condition such as PKU. As you have mentioned, I believe you are correct. I would still say someone has PKU, no matter what diet they are being fed.
Sometimes, getting half the amount of functional protein due to a mutant allele at the other locus is not enough for normal function. This is referred to haploinsuffiency, and is exhibited in diseases such as Fragile X syndrome. Don't get too caught up on this, but because this is still a loss of function mutation, it is generally still referred to as recessive, even though a heterozygote will still exhibit the disease to some level.
Finally, there are mutations called gain of function mutations. In these types of mutations, a protein does not lose its function, but rather takes on a new role. The classical example is Huntington Disease. Expansion in CAG repeats at one of the alleles will result in a mutant Huntingtin allele, which gives rise to additional glutamine residues in the Huntingtin protein. This polypeptide is now toxic, accumulates in the brain and causes neurodegeneration over time. Although you are getting normal Huntingtin protein from the unaffected locus, this cannot overcome the disease because the mutant allele is producing a toxic product. Hence, one mutant allele is enough to cause disease and the condition is dominant.
I hope I haven't confused you. This is something which is taught appallingly badly at VCE level. The sooner students realise that alleles are not dominant/recessive and instead this distinction is made based on the proteins which the alleles produce, the less confusion that there will be.