If the story we have here is the whole story, I can't see what the OP has done wrong.

I cannot see why the seller should refund anything.

Plus, that PM fits the criteria for Feedback extortion - (if you don't look at his words literally - so get advice from eBay on this, i.e he hasn't specifically said he will leave neg or neutral or trash your stars - but the implication is certainly there.

"Threatening to leave negative or neutral feedback for another member unless the other member provides goods or services not included in the original listing is not permitted.

Buyers are not allowed to threaten sellers with negative Feedback, neutral Feedback or low Detailed Seller Ratings in order to obtain goods or services not included in the original listing."

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The buyer's concerns are with the warranty, and with the location of the supplier.

1) If the OP can prove via her receipt or other menas that the Camera was from an Australian Camera Supplier

 - what does the Australian mean? That the supplier was Australian by nationality, that they are/ do supply cameras to Australia (which they obviously do - note there is nothing saying whether he does this legitimately - in theory, Santa clause is an Australian Supplier as is every person who supplies anything to a person residing in Australia or of Australian Heritage)

 - or does it mean a supplier who supplies australian made cameras........

2) The seller says the camera is under warranty, she makes no claims that it is transferrable or to whom the warranty applies.

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The fact this guy is now happy to have the camera for $150 less, so a cost of $850, suggests, he doesn't really have any issues, just realizes he assumed what he shouldn't, didn't ask the right questions and is now trying to force a discount.

He probably wouldn't have bid if his interpretations matched his expectations, but that isn't the seller's fault.

I wouldn't have bought my last keyboard if I had have known it didn't have some of the features I "assumed" it had - but that fault is mine., not the person who sold it.

Nor would I have bought my previous car if I had have realized that "seats five people" didn't mean "in comfort" or legally or if 2 of the passengers were over 6 ft tall..... however, it does have 5 seats and 5 seatbelts and is legally allowed to carry 5 people, they just have to be smallish LOL

The point - it's all stuff I could have checked. But I didn't. I assumed things to suit my expectations, doesn't mean the other person did anything wroing.

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If this were me, I'd stand my ground, I can't see why the buyer is entitled to anything. (other than the camera that he won)