I guess my main concern is if eBay really did refund the buyer, do they deduct the funds from your eBay balance? The funds for the sale itself is still pending because the case is still open. Does this get taken by eBay since they issued a refund? 

They say I won't get the item back, so if I lose both the item and the funds, that'd really suck. Not too bothered by the return request itself, just concerned I will lose both the funds and the item (since they did say I won't get it back). I feel I should at least get the item back.