My :2Cents:
I don't know if this has been brought up yet but save all the messages and file a feedback extortion case http://pages.ebay.com/help/policies/feedback-extortion.html
From what it sounds you as the seller went above and beyond the terms of the official ebay sale by providing, at the buyers request, alterations to the listing in the form of shipping hand handling.
Also,
For item not as described cases, sellers may protect themselves from losing a case if they provide clear documentation that the item was described accurately and consistently throughout the listing and all associated communication.
For example, cases may be resolved in the seller's favor when the seller provides documentation that:
1 the buyer complains that the item is used, not new, and the listing and all associated communication clearly and consistently describes the item as used, or
2 a defect in the item was correctly described by the seller, or
the item was properly described, but the buyer didn't want it after they received it, or
3 the item was properly described but did not meet the buyer's expectations, or
4 the item has minor scratches and was listed as used condition.
looks like you have lines 3 and 4 in the bag,
But also said that the photos would NOT show the cracks or dents.He also said that the box i sent them in was fine.
"ebay buyers protection terms and conditions"
http://pages.ebay.com/help/policies/buyer-protection.html#fraud1