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Magnetic multilayered thin films with perpendicular anisotropy have been patterned into nanoscale islands by ion-milling with an oxygen-plasma patterned carbon hard mask. The islands have been studied by scanning electron microscopy (SEM) and magnetic force microscopy (MFM) to determine the switching field distribution and its origin. Larger islands exhibit coercivities of ~ 450 kA/m (5.6 kOe), but coercivity falls rapidly when island diameter falls below 40 nm. The switching field distribution becomes larger in absolute terms and as a fraction of the coercivity as island diameter falls. The origin of these effects is thought to be edge damage during ion milling and intrinsic defects (grain boundaries or dislocations) in the original magnetic thin film.