This is a bizarre story, considering the guy had zero ( 0 ) feedback. Aren't these guys supposed to prove themselves. I clearly remember when I opened my new account like 7 years ago. The first few big transactions, they held all my funds until the seller actually left me positive feedback. They need to be harder on new user's for this very reason. Not sure how these people can get away with something like this.
Just out of curiosity, how does your feedback look? Considering I am a top rated seller and have been on ebay for years, paypal for over 10. I have to imagine they would side with me in this situation.