Your seller may have misunderstood "or hasn't cleared". It can take up to 10 days for a Canadian e-cheque to clear the US and Canadian banking systems.
And even if your seller is in Canada, PP is a US company and yep, it goes through both systems.
Put that information into the text box.
However, if you were given the choice to cancel the transaction, you were not responding to an Unpaid Item Dispute, but to a Request for Mutual Cancellation. This is a choice for friendly transactions that just are not going to happen. (I suspect I have one of those about to happen right now, because a US buyer bought a large heavy $10 book without asking about shipping cost. And the shipping will be about $30 . If she wants out, I will agree promptly. )
Is the seller also new? She will not see your 'cleared' payment in her account for up to 21 days after it does clear. PP automatically Holds customer payments to sellers who are new, occasional, in high value/high fraud categories, and/or have violations on record. If she fits in any of those pigeonholes, she may misunderstand what is actually happening here.
Cool down and re-read everything you have been sent about this Case. Frankly, I don't think the seller wants to deal with you, for some reason, but she may just be confused and nervous. A little calm communication is called for.
Politely,- Captain Malcolm Reynolds
