IMO, you owe only the price of the item and shipping as you sold the item in good faith. They made a choice, outside of the ebay terms of sale, and must bear the financial burden of said choice. If they tried to complain to ebay or paypal, they would have no case as their PSA investment lies outside of your transaction.
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"The large print giveth and the small print taketh away."- Tom Waits
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