I tried some tweaks for the enemy damage graph.  The two are stated relative to the graphs in vanilla:

Original (not changed as of this post):  -12.5% enemy damage, Veteran and below.

Recent play test (Veteran only):  -5% enemy damage at level 1.  -0.5% enemy damage (multiplicative each level) for each additional level.

The changes bring the damage graph pretty close to Normal, but the difference might still matter.  If I applied the same changes to Normal, then it would of course separate out again.  IIRC, Normal starts to actually pull ahead around level 70 or 80, but the enemy Health in Normal is still lower.

Remember that these nerfs coincide with a 60% enemy HP buff, and a big nerf to potions, heals, and Forcefield.  (Some other survival tricks may have escaped, such as scrolls, but scrolls were never as big as Healbot or potions in long-term recovery rate.  Gems have not been modified, but these were also outscaled by potion spam in the past, and they seem sort of reasonable as is)

Anyway, the last act of Veteran NG0 is still dangerous, but a bit more bearable than before.  Enemy damage has dropped with this graph from 87.5% vanilla to 75% vanilla at enemy level 50.  The forest act had been pretty dangerous, too.  The tundra and the desert might be a bit dangerous now, however, since the new damage graph is higher than the previous one until level 25 or so.  (The first half of Act 1 is sort of innately safe just because of how slow most of the enemies are, and the Tundra is the first real test).

NG+ Act 1 is a little weird so far.  It's mostly safe, but bosses (or even a stray spear) can do 50-75% max health damage to a less-sturdy character.  The enemy damage spike as you start the Tundra might be a bit much.

It also gets harder to burn enemy health, and I think the reason is that casted DPS skills are "supposed" to multiply off of cast speed to get a new total DPS.  My mod mostly shoots that in the knees, and there are two broad and tedious things I would have to do - (1) make sure 2-3 DPS skills survive unchanged per class, (2) increase skill level scaling on cooldown skills (but not too much).  As far as (2) goes, I have a lot of skills already whose cooldowns shorten with skill rank, but that alone doesn't seem to maintain the pacing that was in effect in the earlier acts.  Somewhere around the mines, player DPS starts to drag a little.

I'm not sure if I want to tweak this further, or if I should just shrug and say that all difficulties might be half a tier higher than stated.  Alternately, I could just say that the last part of NG0 is harder than before, and NG+ is most likely perilous.

I guess you could have a mechanic that granted %DR or extra HP based on something (level, armor, stats, etc) or an active ability, but that would also need balancing?  Or maybe it can be left it as is, and implicitly have the same "requirement" to farm DR as in the vanilla game?

With the mod and farmed up DR/HP gear, you'd be less likely to be one-shot, but more likely to be worn down by long battles, since options for recovering from damage are much reduced (though if I'm not mistaken, is precisely what you intended).

Yeah, it's supposed to balance out.  The larger amount of down time is also supposed to be compensated by being able to combo a few skills for concentrated amounts of damage.  The +60% enemy health wasn't so bad at 1-35 or so, but I think cast speed is factored in to vanilla balance in a way that is largely left behind in the current state of this mod.  I could more aggressively lower cooldowns at higher levels, or cook up some non-linear damage scheme.  But I don't really like those two, and I may just go back and have the 60% bonus health to enemies taper off to +0% or maybe even go negative at higher levels.

Hey MTaur, sorry I haven't really studied the internal structure of your mod, but I am assuming your changes are the kind that would work underneath all the classes, even custom classes am I right?

I ask cos I'm thinking of having your mod loaded for all my playtesting wth TL1CP, tho I was going to keep TL1CP on top. Would that work?

...but for levels 1-35 or so, it should be fairly decent overall.  The potion nerf is pretty bearable up until somewhere around the forest act.