OP is asking if Paypal will eat the charge back. It depends on how the buyer paid. If payment from buyer was funded with CC, then they will get their money back from paypal or file chargeback with their CC company.
If through Ebay,their seller protection is supposed to pick of the tab if there is no way to recover funds from you the seller. However, it seems to be on the case by case bases and dollar amount.
If it was strickly through Paypal, they may stick him with the "we found in your favor, but there are no funds in the sellers account to refund" so basically buyer SOL.
You can speed it along by replying to case and telling paypal to grant refund. Then try to issue a refund through the dispute resolution section.
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