I filed a lien for non-payment against our contractor. His attorney ($25/hr) sent us a letter saying the lien was discharged by a lien removal bond. Is this possible and our rights removed?
Yes, this practice is known as "bonding off" a lien claim. A mechanics lien attaches directly to the property being improved; essentially "clouding the title." One option for owners/GCs is to clear title is to file a lien discharge bond (either by depositing cash, or a surety bond) with the county clerk. This replaces the property with the bond, but by no means invalidates or removes your claim; and actually works to your advantage. Your claim is now secured by a figurative "pile of money" as opposed to being secured by the actual property which may have additional or competing interests/claims.
The general GA lien enforcement deadline still applies, 365 days from when the claim was filed. But the dynamics of the enforcement lawsuit, if necessary, can differ a bit as the action will be filed against the bond.
For more on this, see: Don't Be Afraid of Threats to Bond Off Your Mechanics Lien