oops here's the form:

http://pages.ebay.com.au/help/community/defam-form.html

It is up to you if you want to spend the time and energy getting your money back from Paypal, if you can sell the item again for as much as you got the first time and are only out the postage then it may not be worth your time.

I fought for my discretionary payment as a matter of principle because the buyer was a fruit loop and obviously trying to scam sellers, she later tried it on buyers and was last heard of de registered and the police after her!

If you do think it is worth the time then be prepared for a lot of time spent on the phone and the buyer won't suffer as they will keep the refund regardless of what happens between you and Paypal.

Well we finally came to a solution after I sent the buyer photos of the item working.

But unfortunately because the buyer initially refused my refund in the Paypal claim they've closed it in their favour even though I uploaded the photos as evidence...

Ridiculous as it seems, Paypal held the original payment and upon closing of the claim released it but then charges a new payment. Which means it's not technically a refund and I lose the $3 in fees for receiving the original payment. How unfair is that?!

Either way the buyer's got the money refunded. Currently looking to fix the neg, as the comment is completely untrue.

Thank you all for taking the time to chime in.