The Paypal dispute system is a joke. I had a simliar experience with a $300 laptop. The condition it came in was NOT as described. I tried to get the seller to refund, but he just ignored my messages. Unable to contact the seller, I opened a dispute case and I took photos, documented the entire thing, and even did the dispute message system (and the seller didn't respond once to my complaints within the dispute system).
After 3? weeks of no response, I clicked escalate button to firm up the dispute and push it to Paypal so they could decide. I thought I had a clear cut case -- photos, documentation, 21 days of seller not even trying to defend himself.
Seller, upon getting the final warning, finally replied with a message along the lines of "I offered a refund but buyer never contacted me" with no proof... and Paypal voted in his favor.
Fuck Paypal.