Holiday weekend just passed or not, I'd expect a buyer to be keeping tabs on this because after all, the auction ended 8 days ago, well before the public holiday kicked in.

I don't believe you realistically can open an unpaid item dispute for the simple reason the item was not exactly as described.

But you certainly could expect a reply to your messages.

I think the buyer was quite clear. They are angling for a reduced price rather than a cancellation. If I were you, I'd send one last message. Make them an offer. Explain you know they were not aware of the defect and in light of that, you are prepared to reduce the price to X amount if they are still interested in buying it. If so, please let you know by.. I would not give it a minute later than Wednesday, myself.

That way, the terms are clear & if you don't hear from them you can cancel the sale and relist.