Ken,
Use the "Report A Buyer" button on your feedback page (towards the top right, should be over the "Seller Dashboard" link). Explain that the buyer contacted you, ignored your response that you don't ship overseas, and never paid for the item, and tell them that you don't think a buyer should be able to leave a negative for an item they never paid for. Be matter of fact, don't curse or inflate the situation, and there's a good chance that the neg will be pulled (may take as much as a month or so, and you probably won't get any notice of it, it'll just disappear). I've had much better luck with this process than I ever have with calling and getting a live person to do anything. I don't know if it goes through different channels or what, but all I've ever gotten out of live reps is faux sympathy and no helpful action.
In the future, you're probably NOT better off putting in the transaction cancellation request the way you did, because eBay leaves it up to the buyer whether they want to agree with it or not. As you found out, if they say, "No, I still want it" but then still don't pay, you can't do the usual NPB process. Chances are, if you've flat out told them you won't ship to their country, they're not going to try to send you the payment. Even if they do, you can refund it, and then still do the NPB process. The key being that buyers that fail to pay for an item and have an NPB claim filed against them cannot leave negative feedback (or if they already have, but don't pay, the neg will be pulled once the NPB claim is finalized).
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