Yes, you can damage the heater if the water does not remain above the minimum fill line. Some newer, more expensive heaters have a safety feature to shut off when there is no water contact.
When I first started I broke my heater this way.
What type of heater is it, do you keep it vertically or horizontally, and how far down on the heater did the water get when you heard the sizzling noise? Also, did it smoke?
I would check to see if the heater has cracked, and make sure there isn't any glass in the tank if it did. Watch it very closely to make sure it really has stopped working. Think of it like your hot water tank heater for the house, if the element is on without any water in it, it will burn out.
I saw you had a 55gal in another post. What I do in my 75 is keep the heaters horizontal to avoid having to unplug them when I do larger water changes.