OP: since the seller's not working with you, this is your mission:

Open Dispute "Not as described". Paypal will then put a hold on your payment to the seller.

Give a good description of the "not as described" damage, rust, what have you in your "description of problem" and be as precise and "nice" as you can. The seller sounds like he will come off as an asshat, so that will put you in good standing with Paypal right off the bat.

When (or if, but I'd lay odds Paypal will side in your favor - yes, that's an opinion based on personal experience) Paypal finds in your favor, they will release the funds back to you once you show proof that the frame has been shipped back. Personally, I find this part of the process a little dubious; they should wait until the frame is delivered back to the seller, but that's not always the case. So, ship with Delivery Confirmation - but don't worry about insurance (why, right? It's already jacked-up and what's the seller going to say? He's not the buyer, you're just shipping his POS back).

THEN, and this is important: CALL a Paypal rep and give them the following sob story: "Man, this process worked pretty well, but in the end I'm out the cost for shipping back, all because I trusted the seller and his description. In the end, I paid X amount just to get a hands on look at a POS. Can't anything be done about that?"

Paypal very likely will refund (one time only) your RETURN shipping as well.

This is exactly what happened to me with a pair of SR hubs from Europe. The only problem in the end is that the process took so long it went past the cutoff to leave feedback for the crappy seller. Oh well, can't have everything...

Let us know how it comes out.

DD