I enlarged the photo a bit to get a better look at the pattern/texture of the damage. Looks like this:

Doesn't look too much like the porcupine damage in jley's photo. Surprisingly (at least to me), I have been told that this is most likely the work of a pileated woodpecker. I had no idea that a bird could cause this type of damage. A biologist friend of mine told me that she had observed these birds at work on her wooded property near Eugene and that this is exactly the kind of thing that they do. They are large birds, comparable in size to a crow. They will pull away strips of wood and toss them aside, resulting in the shredded look that is seen here and the pile of wood chips at the base of the tree as seen in the original photo. This tree is in poor health, if not already dead, and probably was home to carpenter ants or other insects which the woodpecker was after. From what I've read, this is the typical situation where a pileated woodpecker would go to work. I wish I could have been there to see it while it was going on. From what I've heard, they can put on quite a show when they really get going.