Assuming the siding isn't rotted and assuming your siding is painted wood or something similar... You can get many different wood filler products that will work to fill a small hole. Make sure the one you get is made for outdoor use, does not shrink and is paintable. Most are some form of paste that you can fill and smooth with a putty knife. Do this in dry weather. Clean the area, then fill the hole, let it dry completely. Sand lightly if needed. You should then be able to paint over it.

If you have wood siding, the hole could have been made by carpenter bees. look around, on the area right below the hole, do you see any fresh sawdust looking stuff. They look like bumble bees, but actually bore holes about the size of a dime into wood siding, and then honeycomb the inside of the boards, where they lay eggs. They are almost like giant termites.

Pound around the hole from time to time, and see if you hear buzzing comming from inside.

I was thinking carpenter bees, too. They make PERFECTLY round holes. They look like drill holes.

When the larva hatch, the woodpeckers show up and start feasting, so beware.

.

[This message has been edited by knit1purl2 (edited March 28, 2001).]