As Michael stated a link to the auction in question would help greatly. I would like to see the bidders feedback and see what else they are bidding on to help form an opinion. (a lot can be learned be 'reading into' the feedback)

As it stands, Michael is 100% correct. There are indeed a lot of 'flakey and unreasonable' people out there and you just dealt with one! In our hundreds of eBay transactions I have only had to deal woth two of them and so I know exactly how frustrating it can be! You can have a picture and a detailed description and someone will find fault in it somewhere, whether there is a fault or not.

My worthless opinion is issue the refund and forget it. Contact eBay and get a credit for the returned item. (thank goodness eBay allows that) You can try to reason all day long with a nut and you'll only end up with a bigger headache.

My case in point....

I put a group of 11 old political buttons on eBay about 2 years ago. I knew only that they were at least 25 years old, as I picked them up in person in the early '70's. About a week after I sold them I received the strangest email, it read like a chapter from a book! I emailed the guy and asked exactly what it was about and he stated that 2 of the buttons were not as stated and wanted 1/2 of the bid back. Yup, not 'as stated' (which they were and there was a scan of all 11)...he wanted HALF the money back and wanted to keep the other 9 buttons!
Yeah, right, I made him return all of the buttons before I would refund the entire bid amount. (he ate the postage) I tried to reason with him on a fair return but he made a point to inform me that he was an expert on political sciences being a college professor! (you can't reason with an expert nor a teacher)

Anyway, if we could see the link to the auction it would be interesting and we could form a little better idea of the situation.