Do what i did.
Call his bluff. This happened to me once and i wrote a very professional sounding email. In It, I stated I had contacted the local police and that they had said they had enough evidence arrest him for fraud. I proceeded to inform the buyer that if he did not drop the paypal case withing 24hours I would proceed with having him arrested :D
I showed him the proof of delivery, and his signature (he had signed for the package 4 hours earlier!!).
3 hours later, he ended the paypal case and i recieved a written apology consisting of some bullsh1t story,with all the funds secured and transferred to my bank account!
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