So I was fighting heroic Lady Naz'jar for fun... and she had like 20 health, with an Auchenai and a Mistress of Pain on her side of the board. She attacked my face with her Mistress, and it (naturally) dealt one damage to me. Then, it damaged Naz'jar one damage... then another damage... then one more damage... all the way until the Lady went to -3 health. Then she exploded.
Naz'jar took damage because the Mistress was supposed to heal except the Auchenai converted heal to damage.
But why did Naz'jar repeatedly take the damage?
If you look at the history to the left of the board you can see how the Mistress dealt damage to the Lady.
Because the mistress of pain only stops after she has healed since that never happened she tried it again and again.
This is a bit incorrect because she isn't exactly trying again. Its effect doesn't only trigger when she attacks, it triggers when she deals damage. When she tries to heal, she deals damage. And because she deals damage, she heals you again.