If you can do well on your GRE I think you have a good chance of getting into a PhD program. If you can address your GPA in some way in either your LOR or personal statement I think that would be good. It might not hurt to split your applications 50/50 to MS and PhD programs just to be safe though. GPA is only a small part of your overall application. The fact that you have research experience is a big boost to your resume. Other than that your resume seems pretty good.
I was able to visit several schools to tour their materials science programs this spring and they mentioned that GPA was generally just something to remove applicants. If your GPA is above their minimum requirements then you should definitely try for PhD programs.