Actually, this sound's like you have two problems! The first is structural. When wood shingles are in direct contact with the ground, they get attacked by moisture from rain and snow, not to mention invite an army of house-munching termites into your walls. Depending on how high up the damage goes, you can fix roof shingles by removing the first, second, and maybe even the third row of shingles.
The next step in fixing the wood shingles is to apply a layer of metal flashing beginning at the lowest part of the wall by the ground. This provides a non porous layer by the moist area and prevents that moisture from traveling up to the shingles. You'll want the flashing to come up to at least 12" above the finished grade and then you can cover it with a piece of concrete siding painted to match your foundation. Once the base is in place, you can reapply the shingles and you'll have a wall that is far less likely to be damaged by the elements or the insects
Now that the problem of fixing the wood shingles is solved, consider adding a metal trellis or wrought iron screen to make the wall more attractive. Frontgate offers some beautiful metal forms that are free standing and can be placed in front of the garage wall. Some have holders to place potted plants and others offer a great area for climbing plants to grow onto and camouflage the wall behind it. It isn't a quick fix, but in time you will be very happy with the beautiful and natural results.