We have this happen often.

If the tracking shows that the item has been delivered, then by law due to privacy reasons it is the receiver who has to lodge a claim with AusPost. If they accept they have lost it, then any compensation must be claimed by the sender only after the buyers claim has been found to have that result.

If no insurance is paid for, there is no guarantee that AusPost will compensate anything at all other than the original postage cost.

If the item was sent with valid tracking and the tracking shows as delivered to the correct location as in your case then firstly the tracking number needs to be added to the dispute case and then if there is no action within 2-3 days then you should ring eBay customer support and escalate the dispute to get it closed in your favour.

Don't accept ebay giving you the runaraound. Insist on the case being closed because the tracking shows you have done everything required of you.

If the buyer escalates the case before you get a chance to contact ebay support and is automatically refunded by ebay then still call ebay and appeal the case decision. Be firm and remind them that the tracking showed that the item was delivered and demand a refund. You should eventually get it.