woodpeckers peck to search for food. This suggests that some of your shakes may have bugs in them. I would try to inspect the shakes around where the woodpeckers are doing their damage. If you find bugs you should hire someone to treat the house and then hopefully the woodpeckers will go somewhere else for food.
repairing the shakes that are damaged should not be hard at all.
-renee

we had the same problem. wood bees would bore into the shakes to lay their eggs, then the woodpeckers would come and almost destroy the shakes getting the larvae out. get rid of the bugs and you get rid of the woodpeckers.

i have not repaired our shakes yet, i am going to try filling the smaller holes with wood putty then restaining. since i hav eto restain the whole house anyway, any new shakes will be covered.

In Indiana we had a woodpecker going after some wood trim along the roof. (The real problem was, he was waking us up!) Same as above, upon closer inspection, there were large tunnels in the wood that we believed to be made by bees. I took a screwdriver and gouged the tunnels open and filled them with wood dough.

Afterward, the woodpecker went to the neighbor's house. (But noone in our neighborhood had cedar shakes.) I think he had already taken care of the bees at our house, because I found nothing but the empty tunnels.

My sister went through what jeremy101 described, the had a goofy woodpecker that kept waking them up too. I don't know what my b-i-l did to resolve the problem permanently, but in the interim they put one of those large owls with the bobbing head on the deck railing. That deterred the woodpecker. You can pick those owls up at feed stores and landscaping stores.

My home (and a number in my neighborhood) have been attacked by Pileated Woodpeckers. In our case, it wasn't food that they were after, but rather a nesting spot. They chopped holes through fir siding only to be disappointed in finding a large cavity (called an attic) instead of a nice cozy hollow in a tree. I have (to date) patched 4 holes (6" diameter) in my siding. The siding is stained, so matching was not much of an issue. I can't wait for mating season!

We had the same problem. the little guy kept waking us up, and there are holes all over the clapboard... too high for us to get to, so I'm looking for a handy-man with an extension ladder to fill the holes.

We haven't had the woodpecker back in over a month. Here's what we did: DH found shiny silver christmas ribbon, and tacked it to the side of the house, along the areas where the woodpecker liked. He left the ends so they'd blow, and woodie doesn't like it.

Woodpeckers peck for four reasons: 1) food (we had the pest folks out, and they told us the peckers aren't after anything, but they (the pest control people) will be back out this spring to take care of carpenter bee larvae) 2) nesting 3) mating calls 4) territory.

for us, it was territory. And they are very territorial guys! Once they decide they like your house, they are tough to get rid of. Start early, before, like you, they think it's their home and that you have no right to send them elsewhere!

Note that woodpeckers are protected through, so you can't just go out and shoot them (as tempted as you might get!)

here are some links you might find useful:

1) ehow Prevent Woodpeckers Pecking
2) Living with woodpeckers, and conflicts with people
3) Woodpecker Damage control, and why they "drum"
4) MSPCA Help with Woodpeckers
5) Critter Ridders: Woodpeckers