When does seller's responsibility end?

Anyone still following this thread; here is the update. Paypal ruled in his favor, I received the DAC back. As I suspected it works perfectly. However, it is missing a DIN cable, and the plastic inner wrapping is missing. Also the manual is torn.
I called Paypal and re-opened against him to try and get my cable back.
Nice. I like using Paypal, but this makes me seriously reconsider them.

Sounds like the weasel was just trying to shake you down on the price. Good luck with PayPal.

I wish you the best of luck, but did you sign for the returned item? Paypal won't do anything about stripped parts. That happened to me once and I even had the Police come to my house to make a police report. Hopefully it'll never happen again, but if it does, send the unit back to your local post office and open it in front of wittnesses while taking pictures. The unit I had returned was missing the PC, manual, and demagnetizer. It worked fine and I sold it for more money to someone else and it still works fine. Unfortunately for the guy that did something similar to me left me his work phone and address and I got him fired after months of hassling them via pay phone and mail with the help of some friends. He to this day still hasn't figured it out. I don't know why people are allowed to get away with these things, but I'll bet his Credit card co not paypal made the decision. The guy that tried to cheat me was even suspended by ebay for too many negatives, but it didn't help me much. You'll just have to replace the parts and resell the DAC and hope you don't lose too much. Best of luck. If the unit is still working as you say, you did your part.

What happened, were you lucky with PayPal ?

I agree with rlwainwright and many others here.
eBay/PayPal nearly always take buyer´s side, even when buyer is evidently a liar.
I speak of a recent experience with a scam artist on eBay, with a help of eBay this buyer actually caused freezing my account with 2000 euros in it.
Practically they can freeze a buyer´s account as well without a reason and notion whenever they want. They can hold your funds/money for 180 days.
Beyond insulting. It´s a neverending nightmare.

1) Nowadays PayPal practically almost always takes buyer´s side, whatever the case. How stoopid is that ??
2) Freezing seller´s and buyer´s PayPal account without a notion and for whatever reason that suit for them is ridiculous and actually criminal because it prevents you, as a seller or a buyer doing your business and thus simply harms your normal living, if you ask me.

These prove that PayPal´s policy is dishonest, at least and has nothing to do with fairness not to say common reason and constructive spirit in business.