I had the same problem with Paypal. I had to pay to get confirmation that the unit was hacked.
Basically, you have to decide how much you are willing to lose.
Your choices:
1. Obtain inspection from qualified third party source and if Paypal finds in your favor, you will also have to ship the unit, at your expense, to Paypal before you get a refund.
2. If the seller offers a partial refund, it may be worth taking due to the cost and aggravation if going the first route.
3. Just chalk it up to a poor Ebay and Paypal experience.
I tried the first route and came to the conclusion that I should have taken the 5 bucks the seller offered.
I don't plan on using Paypal again:
http://www.mympxplayer.org/im-done-w...al-vt3580.html
BTW, Paypal will NOT accept any documentation such as this site, or any other site proving the fraud. They will NOT accept 9 pages of negative feedback on the seller (all complaining of the same fraud). The won"t accept screen captures of the player before and after formatting it to remove hack. Bottom line - Paypal will insist that it be checked by a qualified third party.
Good Luck!