Certainly feel OP's pain here and believe he is being generous in his responses to buyer. Had similar on a deal on another forum which left a sour taste.
My experience with Paypal is that they side with buyer everytime there's a report of item 'damage' to save themselves hassle of dealing with buyer's credit card company, but an important part of this is to report supposed shipping damage to Fed Ex. They will usually send someone to view the boxes at recipient's location to determine if the damage was possibly shipping related, and if so they can help resolve it, but even if not, this is important data for further interactions with the buyer and can make some who claim shipping damage soften their stance.
Now it is still possible the buyer is being straight up and the damage did occur after you sent it but before he received it, but I'd get the shipping company's examination on this just for the record. As shipper you can initiate this and they'll contact the buyer to arrange inspection. The suggestion to send pics of corner damage to Harbeth is a good one too.