Ask a Business Lawyer. Get Business Law Questions Answered ASAP.
You are right, and you are going to get nothing for it.
They could easily see that it was the wrong model without using it.
Paypal and e-bay are WHORES who will return the money to the buyer every time to avoid conflict. As between the merchant and the customer, to them the customer is always right.
They know that what you have lost is not worth going to court over for you, especially trying to sue somebody in another city, so they will treat you like dirt. You will learn a valuable lesson about e-bay and paypal and move on with your life.