A member here (tommycent) discovered 2 1981s a while back. Mike Diamond did a Coin World article on it. Could this be Rim Restricted Design Duplication, or is it some form of die attrition/peripheral die damage? Could it be both. There appears to be some minor die attrition in that area, but the anomalies at the rim edge resemble the top of each letter. Attrition link: http://www.error-ref.com/die-attrition-error/ RRDD link: http://www.error-ref.com/rim-restricted_design_duplication/
It kinda looks like rim-restricted design duplication. The problem is that each "letter top" that appears at the internal margin of the design rim flares out instead of duplicating the shape of the letter below it. So it may be some form of die deterioration affecting the rim gutter that is guided by the letters abutting the rim gutter.
A key piece of evidence to look for in the intervals between the erstwhile letters would be the presence of die flow lines identical to those seen in the field. If the two sets of die flow lines are the same, that would support the RRDD diagnosis. Naturally, this can only be done under a microscope.
I don't know if, given the level of circulation, it would be worth your time to take a look. If it's something that interests you, I'll be glad to send it. Thanks for the analysis & explanation.
I have no need to see this specimen, but if you wanted your curiosity satisfied, I would be willing to examine it for you.