Does anyone hate pulling masts out as much as I do?

Yes, I think it looks cool to have the masts come off. It does make them look like they are taking damage. But after watching my friend accidently snapping a mast in half yesterday, I would love to hear some alternate ideas on how to mark damage without removing masts.

I did read about putting rubber bands on the masts. But they are either too big and are a pain to put on or too small.

Any suggestions?

You could try attaching small pieces of "postit" to the dammaged masts, or be more careful removing them.<no insult meant> :)

We just use the very same glass beads used to mark figures in clix games or as tap indicators in magic.
Whenever a Mast is eliminated, we place a bead on the ships outline in its main card at roughly the position of the respective mast.
If thats not clear enough (many ships with many masts) I suggest putting the appropriate number of beads there at the beginning and removing them to mark which masts are gone.
Either way, you can quickly see which masts are there and which not.

Of course, in big multiplayer games, thats not a perfect solution, since you cant intuitively seize up the ships just by looking at the actual playing field, but it works out well enough for smaller games.

sometimes i use the english red streamers put on masts taken out... works well

At first I was like, "What is an English red streamer? Is that a candy or something?"
Then my brain kicked in.

That does sound like a cool idea, that could work. I will have to start collecting more of those.
I went to staples recently and was looking for some small type of clip. If they made miniature clothespins, those would do the trick. You could just attach some fire or explosion things to them, and then clip them on the masts.

I have these little flame colored hats that I slip over the tip of each sail (when I'm too lazy to pluck the mast off, or I want to add some color to the ships). It's just a pocketeed triangle wedge of paper that goes over the first sail of a mast. This way you aren't pulling off masts, and you have a visual representation on the field.