Burned Edge

1. Type the text with a background.
2. Draw the shape to be burned with marquee tool.
3. Quick Mask.
4. Filter > Pixelate > Crytalize (cell size=10).
5. Switch back to Normal Mode.
6. Select > Save Selection.
7. Select > Modigy > Expand (=5).
8. Quick Mask.
9. Filter > Blur > Gaussian Blur.
10. Switch back to Normal Mode.
11. Select > Load Selection #4, and use Subtract Mode.
12. Image > Adjust > Hue/Saturation.
13. Check Colorize. This step very important as it will give you the burned colors.
14. Voila! Actually my example is not that great at all :(