Balls issues in the drops.
 

So I purchased a B17 second hand. I've got it positioned at about the right height (leg is straight with heel on pedal at full extension). When I ride on the tops or the hoods, it feels awesome, like I'm not even on a saddle. However when I get in the drops my balls get squished back and forth very painfully as I pedal. I prefer to ride in the drops. Any tips or tricks for saddle positioning that might alleviate this problem?

Have you tried lowering it a tad, or slightly dropping the nose?

a little lower, and slide it a little farther forward on the seatpost.