http://resolutioncenter.ebay.ca/
But you only have 45 days to Dispute and unfortunately not only has that time passed, but the seller is right, PP will require you to return the item in order to get a refund.
If the seller does not refund willingly, and you can prove that the item has been returned, PP will refund you and go after the seller.
But.... only 45 days.
If you were smart enough to pay by credit card processed by Paypal, you can call the cc's Customer Service 1-800 number, usually on the back of the card, and ask about a chargeback. They may or may not require the item be returned. They usually have a longer deadline, but there is one, so act immediately.
And make the clerk's life easier, have the dates, transaction numbers, prices etc handy for her to process your refund quickly.