Try the \L and \E thingies (i prefer $1 instead of \1 on the 'replace' side - \1 really should be used on the 'match' side):

s/\.(.)\.WI$/\_\L$1\E\_w/g;
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This produces 'ABC_a_w' - was the 'D' in 'ABD_a_w' a typo? Looks like it is.

UPDATE: to explain a little bit, \L means 'make the following lower case until \E (end) is found'. Conversely, you can upper case with \U.

jeffa

    A flute with no holes is not a flute . . .
a doughnut with no holes is a danish.
                                - Basho,
                                  famous philosopher