'....My payments for all my items sold are now on hold until matter resolved....'
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So I take it he opened a 'returns case'? For item 'not as described'?
Once the item has arrived back with you, you don't have a lot of choice about what to do 🙁
You have to refund the buyer. (and refund within 3 days of receiving it back, or you'll get a 'defect' from ebay...)
If, when the item is returned, it's not the same one you sent him or it's been damaged etc. , come back to this board for more advice!