AHH good, you're overriding pawn. But you're not overriding the takedamage function anywhere inside there. You'll need to insert the code from above into there (above the defaultproperties). And then, you have to make sure you actually are USING that pawn. If you insert this line into the end of takedamage function, then…
Hm..well, this should be pretty easy with a bit of scripting...but I can't tell waht your familiarity level with that is. You'd literally override a function called TakeDamage and just have it to modify health without calling any animations or anything...but if you're not familiar with scripting it's got a bit of a setup…