The 'dammaged' EH is a little... wacky. What you should be using is the "hit" EH, which executes once each time a unit is hit (for enough damage).
From messing around with the 'dammaged' EH, I've noticed it works in the following way. When a part of a unit's body is damaged enough (usually when it turns 'bloody', like when the arms or legs turn bloody), then the EH executes. If more than one part of the body is damaged in one hit (like from a grenade blast, which hits all body parts, or a bullet to the chest, which usually hits the chest and the arms), then the EH will execute once for each body part damaged.
Now, once a certain body part has been 'dammaged' and executes the EH, the EH will not execute again for that body part. Eg, if a unit's legs are hit and the EH executes for the legs, shooting the unit in the legs again will not execute the EH again, no matter how much damage is done. Only by using the 'setdammage' command (unit setdammage 0) on the unit can the EH fire again for that body part.
Unfortunately the above facts make the 'dammaged' EH much less useful than it could be, in my opinion.