You bought. You paid.
Item was shipped to incorrect address.
Returned to seller as Undeliverable.
Ebay will not refund you.
Yeah.
EBay's policy is that Undeliverable addresses are the Buyer's error, and are not eligible for the Money Back Guarantee.
So it comes down to, legally they are in the clear.
Ethically, the seller.... isn't.
Who made the error on the address?
Did you have the incorrect address on your eBay account at the time? (If so I hope you have corrected it.)
Did you have the incorrect address on your Paypal account? Did the PP and eBay addresses match?
That really doesn't help you, except perhaps in understanding where responsibility may lie.
You are also covered by Paypal's Buyer Protection policy.
The PP Resolution Centre is under Tools at the top of your PP account page.
The reason would be Not Received. At the address in your PP account.
You have 180 days from payment for the Dispute.
If that doesn't work, you may be covered by the chargeback provisions of the credit card you use to back your PP account. Card policies differ.
Good luck.