heh, I have a PPL-125 and wondered this also,
as far as I can tell, it should be ok, unless the 18650 will allow the diode to draw too much current.
but I am not gonna be the first to try it ! LOL
I am using 2 C Nimhs in mine now with no problems.
That's quite the jump from ~ 2.4 volts from a pair of nimh cells.
It will definitely work and put out more power but it will be driving the diode harder too. Unless you're willing to risk damaging the diode and know how to tell if your laser is showing signs of distress (mode hopping, etc.) I'd stick with nimh cells in that laser.