For some reason, not sure why, I have been seeing a number of homes lately with L-P innerseal siding. This is the OSB (oriented strand board) installed prior to 1996. The photo below is a great photo of the siding in distress. It is de-laminating. Frankly, when it starts going it is much like cardboard -- it just pulls apart. There is an installation problem here that is often the case. The siding had its share of problems to start with so, when it is not correctly installed, that makes those problems even more pronounced. In this case, there is no trim on this end and, because of that, the material is exposed to heavy rain and moisture. OSB cannot take that kind of abuse. If the corner board/trim was of sufficient thickness, to protect the end of the siding, it would have been a much better installation. Often people do it this way, then smear caulking compound on the exposed material.
Steven L. Smith
Bellingham Home Inspector