Seller is fully within their rights not to cancel and Ebay cannot force the seller to do so.

It's possible that they had another cancellation request and got mixed up, but in reality, sellers do get pretty fed up with buyers asking to cancel as soon as they purchase. 

Has tracking been uploaded to the transaction?

You've been here more than 20 years, so you would know that you should wait until the last day of the ETA has passed and then open a formal dispute with Ebay. Why did you raise the issue with PayPal? You first should have gone through Ebay, but you needed to follow the guidelines. Paypal is a backup, not first line of defence.