Drill a hole with a 1/8-inch bit at the center of the dent. For larger, or unevenly shaped dents, drill a series of holes along the deepest part of the dent.
Thread a machine screw into each hole, leaving about ½-inch of the screw sticking out.
Grab each screw with pliers and pop sections of the dent out by pulling in a smooth, form motion until the dent is level with the surrounding siding. Remove the screws.
Sand the dented area to rough up the surface.
Apply automotive putty to the area with a drywall knife. Fill the nail holes and build up any areas that may still not be flush with the surrounding surface.
Allow the putty to dry completely and sand down the area again, removing any bumps or grooves in the putty.
Prime the damaged area, sand again and apply your finish coat. Two or more coats may be necessary.
Cut the top damaged panel from end to end along its length, just above its middle, using tin snips or a utility knife. Remove the lower portion of the panel.
Remove the panel beneath the top damaged panel by prying up the now exposed nails. Continue removing panels, moving downward until all damaged panels have been removed.
Install new panels starting at the bottom of the damaged area.
Cut the nailing hem off of what will become the top panel by scoring it with a utility knife and snapping it off.
Apply gutter sealant along the length of the damaged panel you cut when you started. Install the last piece of siding into place. Tuck its top under the course above, snap its bottom lock into place and apply gentle pressure so that it adheres to the gutter seal.