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A small section of facia board on an inclined roof edge is starting to bulde. I assume due to water intrusion by the manufactured wood product that was used. The inclined roof edge has no flashing or drip edge installed so I believe that water has wicked around the overhanging roofing material and found the facia. Once the weather drys out I plan on cutting out the damaged area, and re-attaching a new section of facia to what I believe is an end roof joist directly behind it, then install flashing / drip edge material from the roof peak down so it won't happen again. Is this the correct plan or will the facia return to normal when it dries out, therefore all I will have to do is install the drip edge? If I replace the facia board it will be with hardi-plank (sp) instead of GP type boards. Picture attached...

It sounds reasonable that what you suspect is true. Fiber cement siding (Hardieplank) is an excellent material. I'd suspect that once you install that and some drip edge flashing, you won't have problems here again. Just be sure to tuck the drip flashing under the shingle underlayment if it exists.