I have made errors in my assumptions before too. It is aggrivating when you realize it. So, I would explain to the seller that you had mistakenly assumed there was a chip rather than a painting. I would ask if he would be willing to refund the price, less shipping back, ebay fees, and paypal fees. Just return the money he made from the sale and you return the item to him.

When you look at that, the next thing you ask yourself is, "All this for a $10 item?" Keep it or just resell it on ebay.