The seller should not have cancelled the auction, they should have added BIN price and you should have bought it. That means that the transaction is not an eBay transaction and is against eBay rules; can get you both sanctioned.
You can still pay with PP by going into your PP account click on send money (or whatever), select payment for goods and the amount and send it to his PP email address, which he needs to give you.
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Voltaire: “Those Who Can Make You Believe Absurdities, Can Make You Commit Atrocities” .