To render an object or item unusable my means of abuse. To show a complete lack of regard for property not belonging to the user.
"Damn dude, the ambulance is trashed. They must have Leatherwooded the damn thing."
"The engine won't start, this truck is all fucked up! It must have gotten Leatherwooded last night by that crew driving it like maniacs."
"Look at that scrap heap! It's been Leatherwooded into submission."
"Where'd this fucking tree limb come from? Leatherwooded again!"