Sometimes cosmetic fixes are not enough to keep your paneling from looking, well, kinda crummy. Between the cat using it as a scratching post and the kids missing the dartboard a few thousand times, sometimes the only option is to just start fresh.
The worst part of your assignment will be finding matching paneling. Hopefully you have some spare panels stored away in your attic, basement or garage. If you don't, see if the manufacturer has details on where to purchase replacement panels. If you're not sure of the manufacturer, the information may be on the backside of the panels, so remember to look when you remove the damaged piece(s).