I worked up two different sets of damage markers for my battles of One Hour Wargames. The first is a set of figure bases painted red/white with a # inside them. The bases are from Mantic Games.
The next is a series of nails and beads. One inch nail adhered to the corner of a base. Add a red bead then the unit has taken 5 points of damage. Add a white bead the unit has only taken 1. I have several other colors of beads to choose from and may come up with some ideas for colors like a green bead would indicate a fantasy unit has been poisoned. Blue might be a buff or curse of some sort. Here is the same unit from above with beads to indicate 6 points of damage.