This Blender video demonstrates how to make an animation of text that appears to be carved by chipping away a block of wood. Blender version 2.71 was used for this tutorial. This video shows many techniques that may be helpful to beginners and intermediate users.
IF YOUR BLOCK OF WOOD DOES NOT DISPLAY THE WOOD TEXTURE, then do the following:
Make sure the cube object is selected and then open the Modifiers tab. In the explode modifier, remove the check mark that’s next to Cut Edges. This change appears to be required for newer versions of Blender. Special thanks to YouTube user AFWSI for posting this solution in the comments section.
Link to wood image
Block of wood (cube) added.
Edges of cube beveled by using the Bevel Modifier.
Geometry added to the cube by using the Remesh Modifier.
Cube material set and wooden Image Texture added.
UV unwrap cube using “Project from View (Bounds).”
Depth added to the wood texture by using the Node Editor to add a Displacement.
Wood material named.
Wood material applied to text.
Text converted to mesh.
UV unwrap text using “Project from View (Bounds).”
Lighting is setup.
Camera view is setup.
Wood chipping added using Quick Effects.
Particle System modifications.
Blend texture added to control how the wood chips break away.
Thickness added to wood chips using the Solidify Modifier.
Collision physics setup for the floor and the text.
More particles are added.
Render options are setup.
Begin Animation rendering.