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thanks for the question.
yes, for the most part that would be your rights to remedy. to sue, obviously in small claims as the amount is low and the cost to do so cheaper.
in actuality, ebay polices itself but obviously people get screwed at time, as you see. i would consider calling back your credit card company and informing them that the item was returned and therefore they should surely credit it back. you should also re-contact ebay that the item has been returned and kept by seller yet the refund never came.
unfortunately after that the law suit is your only avenue and the fact that you are out of state is a problem.
i am sorry there is no better answer.
you absolutely can have an attorney represent you and can sue for the legal fees as well. there is no guaranty that you will recoup those though. and that is the essential problem that people face in these types of situations. you have been wronged and it will cost you too much to try to recover the costs. it is basically the reason why ebay polices itself although that did not seem to protect you here.