If the damage is gel coat only, the damaged boat’s racing ability is not compromised. To me a two turns penalty is appropriate. 

RRS 44.1(b) - if the boat caused injury or serious damage or, despite taking a penalty, gained a significant advantage in the race or series by her breach her penalty shall be to retire.

The term "serious" in "serious damage" is further defined in WS Case 141:
"As understood in general use, when ‘serious’ is used in the phrase ‘serious
damage’, the term means: important because of possible danger or risk;
having potentially undesired consequences; giving cause for concern; or of
significant degree or amount.

This suggests that when a protest committee has concluded from the facts
found that damage occurred in an incident, it must then consider whether
any of the four criteria implied by the definition above apply, and if so it
should conclude that the damage is ‘serious’.

Questions to consider may include:
(1) Did the damage reduce the safety of the crew?
(2) Did the damage adversely impact the boat’s sailing performance in a
significant way?
(3) Will the cost of repairing the damage be a significant amount relative
to the market value of the boat?
(4) Will the value of the boat after repairing the damage be significantly
diminished?"

I do agree both Greg and Matt.  We recently have had a similar incident in one of our protest hearings.
It is really important to asses whether it is a SERIOUS DAMAGE or not.  As Matt points out and copy pasted Case 141, our answers to the 4 questions will determine the type of the damage.
In our case the damage has significantly and adversely affected the other boats performance therefore we asses the damage as a SERIOUS DAMAGE and conclude and decide accordingly.

There are 3 levels of damage mentioned in RRS:

- in RRS43.1 (c). The wording damage is unqualified, so that  any damage resulting from an incident means that a RoW or room entiitled boat cannot be exonerated for a breach of RRS 14
- in RRS 44.1 (b) - damage serious enough sp that the appropriate penalty is to retire. WS has always been reticent to clearly define 'serious damage'. And the classic answer is 'it depends'. For instance, in offshore and coastal racing damage to a pushpit, pulpit or stanchion can result in the boat no longer being conform to class, handicap or safety regulation. As a result the damaged boat should retire... therefore the damage is serious!
- in RRS 62.1(b) damage that results in a boats race or series score being made significantly worse.

In this case Yellow was RoW changing course, and did not give Green room to keep clear, breaking RRS 16.1. Yellow also broke RRS14. There was damage so Yellow cannot be exonerated for her breach of RRS14.

Green's race score was not made significantly worse by Yellow's breach of RRS 16.1.

There was damage to the gelcoat. If there was no hole or leak, and did not prevent the boat finishing then the only way to evaluate if the damage was serious would be based on a estimate of the cost of repairs and any loss of value of the boat.

So the answer to your question is 'MAYBE'.

If Green believes that the damage is serious she should go ahead with her protest.

I'll add that when discussing damage, it is regular, especially in an arbitration meeting, for a competitor to call damage serious. To them, my shiny boat having a 6" gelcote scratch may be serious. They may also be trying to downplay the damage. I've seen people break a rig and say no, not significant. It's important to evaluate this on its face and potentially look at the damage to make a judgement for yourself as an arbitrator or protest committee. 

This is very interesting and worthy of an article.

I think the offending boat can generally consider here the his penalty is OK. 

He took what seemed an appropriate penalty so did not retire. 

What if he sees the damage later? 

If clearly serious he should retire, but what if the seriousness is questionable? 

Well under rrs 2 the words "clearly established" are used so I think he is OK. 

What can the other boat do? 

Lodge a valid protest, so a hail of protest, and a flag if appropriate flown till she is no longer racing (after seeing the turn and not the damage a problem) then the protest form within time. 

If none of the above then the other boat is fine. 

Two things. 

If in an incident, shout protest, put the flag and keep it up till you stop racing. 

With or without the necessity of the flag, check your damage and if you consider it serious, protest. 
The pc will hopefully uphold your protest and dsq is the damage was serious or say the appropriate penalty was taken. 

You do not have to make the call yourself, if you lodge a valid protest the pc will investigate and make a decision. 
That is why the pc is there as part of the event service. 
Mike 

The second matter I forgot is 61.1(a) 4

If it was obvious to the protesting boat that serious damage had occurred them some obligations do not apply but the other boat needs to be informed within the time limit. Mike