Both environments produce the same result (obviously). The event is firing, and sends me a message, however none of the following lines cancel the item from being damaged, individually or even all together.

@EventHandler
public void onItemDmg(PlayerItemDamageEvent e)
{
	e.getPlayer().sendMessage("Damaged");
	e.getItem().setDurability((short) 0);
	e.getPlayer().getItemInHand().setDurability((short) 0);
	e.setDamage(0);
	e.setCancelled(true);
}

1. The message "Damage" IS being sent to the player when the item is damaged
2. This is the only event and only plugin on the server running.
3. Changing the event priority, or ignoring cancelled to false changes nothing.