How about transparant holes in some parts?
Like, this is how it would work: for each section of the model that is hit, you have three seperate damage "layers". First layer is a simple burn mark, second layer is maybe a hole, third layer is a large chunk.
Even better than that is a dynamic system, sort of like a First Person Shooter: you shoot something, you get a skid mark where the projectile impacted. Then you could have a "High Explosive" tag to the weapon, where if you hit something, you would get a large burn mark, and if you hit it again, or near the first hit area, you would get a hole.
Holes can easily be done with transparancy maps, even now, although it would look better if they were fixed completely
