I don't think that's correct Lyndal.  

If the seller doesn't accept returns - the evidence from the OP is that she had an option to Decline the return - then there is no problem in declining.  Hit that button and it's over.  

The problems start if, like me, you do allow returns (mine are 14 days).  This means that if the buyer opens a case within the timeframe of receiving the item (ebay's estimation if no tracking) then there is no option for the seller to refuse.  And if the seller doesn't accept, then the buyer can escalate and the seller will lose etc etc. which I think is what you are referring to Lyndal

I think the OP was right to decline, and she has messages clearly stating that it is a change of mind scenario.  You would expect that the buyer cannot then go ahead and start a NAD case, but I've never tested this or heard of it happening so I really don't know.  However OP, you have your original ebay message exchange you have good ammunition to fight the case.

If she tries to open a NAD case in paypal you can use your ebay messages for the same.  It probably won't get to that.