In a deep saucepan, about 10 or 12 inches wide, bring olive oil to medium high heat. Stir in onion 1/4 teaspoon salt, and cook for 5 minutes until translucent. Add lentils and stir to coat and combine, cook for 2 minutes.
Add remaining salt, coconut milk, water, and garlic. Bring to a light simmer, then cover and cook for 30 minutes. Remove lid, and taste. Lentils should be getting soft. Add smoked paprika, 1/2 cup tomatoes, and bring to a boil.
Let simmer, stirring, with lid off, for 5 minutes, until it starts to thicken. Add remaining 1 cup tomatoes, and continuing simmer, cooking liquid off, another 12 minutes, or until thick. This level is your preference, cook longer if you'd like thicker.
Stir in lime juice and fresh parsley, serve warm.