chino_morino, You should lodge some form of complaint with ebay and paypal otherwise they just keep getting away with it and ripping more people off. You need to open your player and note the serial number and brand of your memory chip( the largest on the board), then doing a Google search with the info will find your chip specs.
Most people take a little while to fill there players past the 2GB size so it can be weeks before they start having problems by which time either warrenty is expired and they have already placed feedback.
Formatting the player will generally restore the original size but you may have to use a formating tool if Windows has problems doing it. You can get the HP Format tool
HERE
If the player is working OK you may as well keep it as you say you have more than likely done your shipping charges.