No, the seller cannot make it a condition of accepting your return that you retract or revise your feedback. If you have a Significantly Not As Described case on your hands, the seller is obligated to accept that return, whether he likes it or not. Plus found the return shipping.
You were not wrong to leave honest feedback but there is nothing to be gained by leaving negative feedback before your issue is resolved, as you have seen.
As to the question about him not seeing every item that he sells, your seller may be a drop shipper who lists and sells items not actually in their possession.
Regardless, escalate this case as soon as ebay permits it so that your seller is forced to accept the return.
