Buyer claims watch was a fake, need help

As a seller on Ebay, if you make one single mistake, especially if refunds are not done correctly, it will be a time consuming process to rectify it. Allow me to share my experience:

I was selling a Playstation 3.
Buyer paid via Paypal and I posted the item to the buyer.
Buyer contacted me and stated that it won't play any discs, which I honestly didn't realise as I haven't used it for a while and didn't check before listing it on Ebay.
So we agreed that the buyer returns the item and I refund after I received the item.
I asked the buyer to open a case in resolution centre for items not as described category so that Ebay has record of it.
I received the PS3 back and can confirm it doesn't play any discs.

Now this is where I made the mistake:
In the resolution centre at first I couldn't find the link to refund the buyer, so I refunded directly via Paypal by sending the money.
I contacted buyer that I have refunded and request if she could close the case, which she never responded.
As I was worried that my seller's reputation would be tarnished because the case was not closed by the buyer, I initiated escalation to Ebay and explained the whole situation that I have refunded and asked if Ebay can close the case on the buyer's behalf.
Ebay responds a few days which looks like some email template that they have used and highlighted that they will favour the buyer and refund the money.
At this stage, not only I have sent my money to the buyer via Paypal, Ebay also took more money from me.
I had to option to open the case again to dispute and explained to Ebay again that I have already refunded via Paypal.
Finally Ebay then understood the problem and gave the money back to me.

Anyway, this is a great thread and lot of lessons to be learn here.

I hope everything will end up ok this time.