What battery were you using? Most of the cells we recommend around here have a CDR of 20 amps or above. [Edit: I missed it was an 18350. OP's cell is rated at 10A CDR.] CDR stands for "Continuous Discharge Rating." Take special note of that first word, "continuous." At 1.7 ohms, even on a full charge you're pulling 4.2/1.7 = about 2.5 amps. Was the battery itself hot when you took it out (you took it out and inspected it, right?)? Hotter than the mod, or cooler? I'm guessing the heat was just from the atomizer, I wouldn't expect a decent battery should get more than just barely warm, at 2.5A.
There is no real "hard limit" for what damages a battery and what doesn't. The harder you work it, the harder it takes it. The best thing you can do for a battery is never use it, but then you never use it. Low voltage doesn't really become a serious problem until you're well below 3.0v (I've heard past around 2.7 is iffy, and below 2.5 they're trash), but draining it down to 3.0 is harder on the cell than only hitting 3.2, and recharging at 3.5 or above is even better still. At 3.9, you've only drained about 1/4 of its total usable energy, at about 1/8 [1/4] of its max discharge rate. If there are no other signs of damage, I think you probably got off this time. I would have a look at the insulators on your mod and atty, though. If things got real hot they could have deformed, and you don't want that to cause a short later on.
