I will be detailing three different ways to do damage states in UDK. These are just example, the engine is very flexible, and there are many other ways to do this. Use the Example map AOCTO-5-Destruction.
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Initialization
Gate 01
Gate 02
Gate 03
Gate 03 Matinee.
This is a relatively simple Matinee. It will use an event track to pause the animation during damage states. Make sure the Anim Set Group is set to:
AnimSet'CHV_Gate_PKG.Meshes.AS_gate01'
Add an animation to the Anim Track by click it, then typing the Enter key. Add the names: Idle, Break, break_idle, break02, and break02_idle.
http://udn.epicgames.com/Three/MatineeUserGuide.html
Here is an illustration of the 3 damage states.