Jason,
Like nearly everyone here on this board, I stick to chamber pressures for which the guns were proofed. So far as I know, Husqvarna never proofed Damascus barreled for anything other than black powder. Ditto for their very earliest fluid steel barrels. So, I would definately stick to BP or nitro loads giving BP chamber pressures for the Damascus-barreled gun. It is easy to find such low pressure nitro loads for 12 gauge but there are not many for 16 gauge. Perhaps someone else from the 16 gauge loading group can speak directly to such 16 gauge nitro loads -- all my guns have the CIP equivalent proofs.
Niklas