Hum, a dedicated server CANNOT survive a digg effect? Starting at $ 50 US Dollars for a month and NOT capable of the digg effect? Maybe there was no WP cache installed or is WordPress actually not made for the digg, as some WP powered sites had some downtime caused by the digg effect?
Wait, on the other hand this Digg Effect Deconstruction shows the effective way of using WordPress and WP cache:
Use the wp-cache plugin. This site may have stayed up without it, but it prevented the usage of more system resources than were necessary. This site never slowed down, and I was able to use the administrative interface without problems the entire time.
Use WP cache.