Total is $675 which is why I am reluctant to just send to a new address. I mean he may be totally above board and he seems ok. He did buy one of the same items (the order we are talking about was for 3 of the original order) and this was sent to his new address and he looks like he has ordered other things so not sure how he put the old address for this order. 

I think I should refund. Is there a way to refund even though it now says delivered in the eBay system so that the fees are taken off? 

There is no option now to cancel the order. Presumably because it was delivered (even though it was RTS it means it is marked as delivered in the eBay system). 

The only options I have now to choose in 'send a refund' are the following which I suspect mean no fees are given back.  Would the buyer themselves have more luck getting eBay to sort this?

Thanks for all the helpful advice and input, it was much appreciated. I got eBay to ring me and explained the situation and they allowed me to refund the buyer minus the postage and also organized for the eBay fees to be reimbursed to me. 

So quite a positive outcome really. The buyer may end up still buying the items but even if not, at least it was handled with some integrity and the outcome hopefully is ok for both of us. Thanks again.