Paypal issue beware.

I believe that if we bundle up problems and together hit PayPal, we can gather GOOD hit against PayPal. 
One thing I learned about PayPal is you can either bend it over or it will bend you over and there’s nothing in between. The more folks chip in — the better chance of delivering a good blow.
Gather, register, find counselor and go — get your dough back with possible vate!

I'm with @czarivey.  PayPal is not your pal.  For years I used eBay and PayPal to buy and sell, but as you found out @programmergeek,  your words generally fall on deaf ears.  Suffice it to say, I avoid using PP but for merchants/sellers, unfortunately its a necessary evil - even here on Audiogon.

Having said that, if a vendor sends me an invoice from PayPal allowing me to pay using a credit card, I will complete that transaction.   Using a credit card , you can pursue a Dispute/Claim with PayPal, or you can contact your credit card company and file a chargeback.  I'd opt for contacting my credit card issuer.

Unless PayPal has closed my account due to inactivity, I still have an account with them but I've removed all CC and bank information from my PayPal account profile.

You can file a claim with your credit card company to see if that will help.  Next time you ship something have the buyer give you an account at UPS or FedEx so that the claim is submitted on their end.

Been using pay pal for years and have never heard of refunding with out the return of the item. I would contact an attorney and also talk to a reporter with the local news channel. If you can get them involved the public attention may help. When you use Pay Pal you have to back your account with a credit card. You can get a Bankcard just for Pay Pal with a $300 to $500 limit and make the bank contact you over those amounts. As soon as you are paid remove the cash from Pay Pal. Do not use the PP account till you have things straighten out. You can also just use the account for receiving payments and after you give them the Card number cancel the Card. You can transfer to a saving account or have them write a check. The check does take a week. I would also contact the people at AudioGon. They have always been very helpful every time I have contacted them. Maybe they can apply some leverage.
It is very hard to make a damage claim. The shipping companies always say it was not packaged correctly. Been thru that many many times. If the guy signed for the package he is saying the package arrived in good condition. You have very little recourse.
Just curious was this a complete sale in the US? Not overseas?

I call they said because he used some sort of mandated government payment they do not require any evidence that it was shipped back.

What type of payment is this?

By chance was the buyer Ben Carson?