RE: What would you do?
I use e-bay, and have sold on it as well.
The Seller is REQUIRED to honor his deal. He is trying to milk you and I would not stand for it. I would tell him politely, but clearly, that if he does not honor the deal as advertised you will report him to E-bay, AND give bad reviews. Simply put E-bay is set up to protect the buyer not the seller, and they will enforce there rules if you have to take it that far.
Of course you could just back out and give mixed reviews with a comment explaining what transpired.