Go up the ladder at Paypal. If the item was buyer protected, I believe paypal has to cover it. Had a situation also that they said they couldn't get my money back but the item was protected so when I went high enough up the ladder, I finally got someone who had the authority to make a decision to refund me without reversing the payment from the seller.

POLICY:

Purchase protection on eBay — PayPal Buyer Protection.

When you’re shopping on eBay, look for items that are covered by PayPal Buyer Protection.

With it, you get free protection of up to $2,000.00 USD on your purchases. To determine if your item is eligible, look for PayPal Buyer Protection in the Seller Information box on the View Item page. When your transaction isn’t covered by PayPal Buyer Protection, you may still be covered by our Buyer Complaint Policy.