That is the strange thing, the item is marked as payment refunded, I dind't have the option of marking it as "not sent" it was not there on the drop down.  Even when I go into the detail of the sale, it will not allow me to untick the "sent" item box, it just puts it back as sent. 

I emailed the buyer straight away but have had no reply. 

The whole thing was just strange as the refund didn't happen straight away, it happened a few hours later as soon as I marked as sent.  You would think that Paypal would send you a notice to say it has been reversed.

I managed to find a way to mark the item as not sent by going to the item sale history and it allowed me to do it there.  I have already sent an invoice so I just have to wait.

We'll see what happens otherwise I'll need to open an unpaid item case if I don't get paid.