Check the panel to see if the steam has raised the wood fibers you.
How to fix a hole in a wood panel wall.
Press a damp cloth over the scratched area of the panel.
Cut a piece of panel slightly larger than the hole or gouge.
Cut out a hole in 1 4 inch plywood or masonit adding about 1 2 inch or so on all sides.
Raise the wooden strip and pull the nails out with a hammer or pair of pliers.
If the hole is only 6 wide a small piece of 2x4 or even 1x2 and a plywood patch will probably cover you.
Center the piece over the hole lining up grooves on the patch and paneling.
A pry bar or screwdriver will work to lift the edges without snapping them.
Hold up the patch with a strip of masking tape.
Measure the size of the defect in your project and add a little extra around it.
Start in a corner.
Use level to be sure the first panel is straight up and down.
For damage on wood paneling that is deeper such as a hole or scratches the solution is to use wax or sticky putty.
Clean patched hole with vacuum or duster to prepare for the filler material.
Be sure to use a large enough piece so that you can clamp this piece to the wood you want to work with and have enough room for the plunge router to move freely in the template.
In the case of scratches apply it like a crayon and simply color it.
Then cut your patch and mount it to the spanning pieces.
Remove the wood moulding from the sides top and bottom of the damaged panel.
Using a putty knife or similar apply the filler and smooth with larger flat knife i used a drywall joint knife.
The wax is applied to the holes using a putty knife.
Cut panels so lengthwise edges meet over wall studs.
To seal the seams between your patch and existing plywood use wood filler.
Pry off the lower lengths of batten strips but leave them in place between panels on the upper wall.
Wainscoting height can vary according to your needs.
Cut some lumber to span the opening and attach it using screws through existing plywood around the opening.
Hold a hot steam iron against the damp cloth for about 30 seconds.