Sorry, but I smell bull***t. No one pays $260 to fix a $228 item without contacting the seller first.
First rule in a situation like this, buyer contacts the seller and *asks them* how they want to handle it.
If they want to send back the camera for a refund minus shipping, fine. (...and, technically, you're not even obligated to do that.) But trying to pull the seller into some kind of suspect repair deal doesn't sound legit to me.
