Master of Ethirium, Goblin Welder and damage

[Mantis]

The following scenario occured in a tournament:
Opponent had a Goblin Welder, Mox Emerald and a Mox Jet in play and an artifact in the yard.
It was my turn, Master E had just received 2 damage in the combat step and being 3/3 he obviously didn't die. Then my opponent used his Welder to exchange a Mox for the artifact in the graveyard. Does Master E die in this scenario? I wasn't sure so I pointed it out to my opponent and he put the MoE in the graveyard and the judge watching over our game didn't stop him. The logic behind this was that Master E would become a 2/2 for a split second when the Welder ability resolved. Talking about this in the car afterwards me and my friend weren't sure if this was correct.

I hope everything is clear otherwise just say so and I'll try to explain it again.

[BigBarn]

Creatures are only put in the graveyard when State-Based Effects are checked.  So, after the welding, the game will run through all of the State-Based Effects and see Master of Etherium as a 3/3 with 2 damage on it. 

For the same reason that you can Tendrils of Agony yourself when you're at 2 life, Master of Etherium will live. 

[Nefarias]

And just for some added clarification, State Based Effects are checked every time a player would receive priority. Since no players receive priority in the middle of the resolution of Goblin Welder's ability, state based effects aren't checked.

[Mantis]

Okay thanks for clarifying.
I'm actually not sure if I remembered everything from that scenario right, it seems a bit too obvious now that you guys explained it.