Sorry but you are completely in the wrong here.

While neither buyer or seller have Paypal protection for a pick up item you cannot refuse the payment no matter what you say in the description. Saying you will not accept Paypal in the listing is actually a policy violation. You also have quoted COD as a payment method, thast does not stand for pay on pick up, it stands for Cash on Delivery which means you either use the very expensive Aus Post COD service or you deliver the item yourself and collect payment when you get there.

The buyer did absolutely nothing wrong and if ebay contact them because of your report you are the one who is going to end up with policy violations against your account.