Ebay removed your Negative Feedback because you opened an Item Not Received case on something you didn't pay for. You lost the case, the feedback was removed. It was probably the worst method for you to try to resolve this problem, but I can understand the reason you did it, feeling you had no other choice. But essentially, you lost the right to leave the seller negative feedback (as was richly deserved) when you went after him with a case you could only lose.
When a seller behaves this way, clearly he is in the wrong, but there is nothing you can do but move on to another seller with the same or similar item. For reasons that make sense to no one but the seller themselves, they have decided not to sell it to you. Luckily, there are millions of items available for sale on ebay and only a few (?) silly sellers like this.
The penalty for cancelling orders for no reason is that ebay gives the seller a black mark on their record, behind the scenes. Your seller would have gotten one, but as the buyer, you'd be none the wiser. Too many black marks and a seller's selling privileges are suspended.
I'm sorry this transaction did not go as it should have. Better to look for another seller now.
