Building Arduino Nano from components
You can probably do a lot better than $17 but not much better than $8:

http://www.ebay.com/itm/Mini-USB-Nano-V3-0-ATmega328P-5V-Micro-controller-Board-For-Arduino-compatible-/130977189883?pt=LH_DefaultDomain_0&amp;hash=item1e7ed94ffb

If you don't need USB, you can use a Pro Mini and they go for about $4 and that's really hard to beat.