Weapon template and Special Items

[GentlemanVoodoo]

Can someone please explain if this is correct by 3.5 raw? I am looking at the feycraft weapon template which from my interpretation decreases the weapon one size smaller but for most weapons would make it a light weapon able to be use one handed. Though the alchemical gold/platinum special materials does make a weapon heavy to increase the damage die one size larger but still treat it as the same size.

So by this logic, as I don't see anything that prevents the two from being used from the text, would using this on a spiked chain make it a one handed weapon dealing 2d4 damage? Is this correct?

[Necroticplague]

Sorry, this doesn't work, but it's unrelated to template-material interaction.

The feycraft template can be added only to light or one-handed melee weapons, and to ranged weapons
The spiked chain, being a two-handed weapon, cannot have the Feycraft template applied.