Wow, he left you a negative (your only one) for leaving him a neutral -- when he sent a defective game? Basically, he should have left positive (since you paid right away) or, at worst, nothing. In addition, an honest seller probably would have offered to refund your shipping.
This is why I think the new regulations regarding feedback might be a good thing. I've never dealt with ebay in a situation like this, but I wonder if it's possible to do anything about it (like getting that obviously whacked negative off your record).
I dealt with a similar individual recently. I ordered two games, which were described as "NEW". The first one was clearly used, dirty, and smelled like cat urine. The second one was not only used and smelly, but the completely wrong game. I paid to send BOTH items back (to Belgium), AND left the guy positive feedback as soon as he refunded me, as a sign of "goodwill". The ass responded by leaving me NO feedback. :/ Granted, the entire situation was my fault, I rolled the dice despite the guy's less-than-perfect (but not terrible) feedback record.
Anyway, I hope there's something further you can do. Perhaps you can continue with the PayPal claim, paying to ship it back might be worth the pain in his rear... and as I see it, a matter of principle. Sure, you will pay shipping, but he will be forced to pay back the money he ripped you.
