Try disabling any or all Gui editing addons, like GUI plus or any client sided addons, then try it
I don't have any GUI editing addons.
Script_CustomMS
can you run a trace(1); with a dual client? join your own server, set things up, then input trace(1); to console and attempt to damage him; then quit and link the console log here (its probably going to be big so you may have to upload it)
Now I have an entirely different issue (don't want to make another thread to clog up the help section).