Use a flat bar to pry up the board above the damaged one. Work slowly. To pop up the nail heads, place a scrap of wood on the board and hammer it sharply. Now you can pull out the exposed nail heads without damaging the siding. To cut out the damaged section: Saw through the siding and expose the wall studs. Place a strip of building paper under the cut ends of the board. Use galvanized nails to secure the replacement board. Finally, renail the board above.
Replacing Damaged Vinyl Siding
It's easy to remove cracked vinyl siding. A zip tool -- available from your local supplier -- unlocks and later relocks the bottom of a panel so you can get at the nailing flange below. If you can match the siding, buy a replacement. If not, weld a scrap of siding over the crack with PVC cement and replace the panel. Cut replacement pieces with a hacksaw or utility knife. Fasten the panel by driving nails through its slotted holes. Use the zip tool to lock the panels back together.
Do not hammer the nails tight. Vinyl siding must be able to expand and contract or it will buckle.
Patching Aluminum Siding
Because of its interlocking design, aluminum siding is hard to replace. In most cases, you'll find it easier to patch small holes and dents. Use a two-part epoxy filler. When you must replace damaged panels, cut out the damaged section with a utility knife. It takes several passes to cut through the siding. Cut a patch panel that will overlap the damaged area 2 inches on each side. Remove the nailing flange of the new panel so that its top just touches the underside of the course above. Cut off the flange, and bond the patch with an adhesive caulk.