if ( Input.GetButtonUp("Fire1")         // if pin is pressed
&& lerpAmt < 1 )                 // and lerpAmt is not already at max

{            
lerpAmt += Time.deltaTime / timeToMove;
power = Mathf.Lerp(powermin, powermax, lerpAmt);
}

That isn't in a function, it needs to be so.

------------EDIT------------------

var cannonball : Transform;
var power = 0;
var speed = 5;
var powermax = 5000;
var powermin = 100;
var timeToMove : float = 0.5;       // time to move (in seconds)
private var lerpAmt : float = 0.0;  // current lerp 't' amount (private, 0-1)

function Update()
{

    if ( Input.GetButtonUp ( "Fire1" ) && lerpAmt < 1 )                // and lerpAmt is not already at max
    {
        lerpAmt += Time.deltaTime / timeToMove;
        power = Mathf.Lerp ( powermin, powermax, lerpAmt );
    }

    if ( Input.GetButton ( "Fire1" ) )
    {
        var projectile = Instantiate ( cannonball, transform.position, transform.rotation );
        projectile.rigidbody.AddForce ( transform.right * power );//cannon's x axis
        Physics.IgnoreCollision ( projectile.collider, collider );
    }

}

That's it cleaned up and in the Update function...

Try this script. I tested it and it seems to work just fine. If you don't want to automatically shoot when powermax is reached, uncheck Auto Throw in inspector. Easy.

var cannonball : Transform;
var speed      : float = 500; // speed is power per second
var powermax   : float = 5000;
var powermin   : float = 100;
var autoThrow  : boolean = true;

function Update() 
{    
    if (Input.GetButtonDown("Fire1")) 
        StartCoroutine("Cook");
}

// This is a co-routine. 
// I used the term "to cook a grenade" as popular in many action games.
function Cook() 
{
    var power : float = powermin;

    while (Input.GetButton("Fire1"))
    {
        var move = speed * Time.deltaTime;
        power = Mathf.MoveTowards(power, powermax, move);

        if (autoThrow && power == powermax) 
            break;
        else 
            yield;
    }

    Shoot(power);
}

function Shoot(power : float)
{
        var projectile = Instantiate(cannonball,
                                     transform.position,
                                     transform.rotation);
        projectile.rigidbody.AddForce(transform.right * power);
        Physics.IgnoreCollision(projectile.collider, collider);
}