Posted By:
EricEdited to add: If he files a claim against you, list all your evidence and you should be good.
You get into problems if/when the seller does a chargeback to your account through his credit card.
The only way PAYPAL will side with the seller in this senario, is if you shipped with signature confirmation. You can have insurance, delivery confirmation, etc, but if you don't do signature confirmation on items sold over $250, you're pretty much screwed.
I know because this happened to me, when the guy issued a charge back against me when he lost his PAYPAL claim, followed by ebay claim.