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I fell into the same Scam and getting a cheap item.
I filed a claim and got the same result, pushing the date and this seller wanted to pay a partial refund. So, reading into this community, I knew, I had to return the item, so I called PayPal and explained everything and mentioned that many people fell into this, so, now on this company will be removed to use in PayPal and I got my full refund. (I think I was lucky).
Lessons learned: Do not buy anything from China
You got farther than I did (I was being told to ship it back at my own expense). But we both ended up in the same place: trusting paypal for transactions and being told Paypal sided with the scammer. I'm sorry that happened!