Buyer wants me to cancel, but I get fee's for this?

I've had a bit of a nightmare buyer on Ebay, messing me around back and forth about 2 items I'm selling. Anyway, they eventually bought another item - (live bugs) and asked me to sex them AFTER buying. The listing does not mention this service, but to be nice I said yes I would, but it's not 100% guaranteed. Now, I wake up this morning to find they have bought (and paid for) another version of the item from me (same 'product' just more in a 'pack' than the previous item) to ensure they get enough animals to have both sexes in the group, since it's not guaranteed, and asked me to cancel their other order.  It's well past the '1 hour' after them paying. 

If they had been patient, and actually contacted me, I would have made another listing with the top up amount of bugs they wanted, with free postage, so they weren't charged twice, and no orders had to be cancelled.

Now I understand if I as the seller cancel the transaction, this goes against my seller rating and I still get charged paypal fees? I'm not at all happy about this - I have asked the buyer to cancel the order themselves, but all I've had is a 'question from buyer' message, with her saying that she wants to cancel the order... again.

Please advise? 

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My advise..... register as a business and trade legally on eBay ....Your buyer could be on their way to Trading Standards.

 

also it is a policy violation to state in the listing that the item is advertised elsewhere