How is it possible for someone without a paypal US address to buy from you...unless you offered the item for sale in Canada, the guy should not have been able to bid on it? I am in the UK and forever being pestered by some dude Krychecz in Eastern Europe whenever I sell Pentax kit...he has to surf ebay.co.uk, and then tries to contact me to offer the item for sale in [x] country. But my items dont show on the foreign sites, as I dont want the hastle of dealing with international postage.
If you have advertised it for sale in Canada, then you would be reneging on your deal...Ebay may or may not let you cancel with a refund on the fee, but I'd say you'd best contact them to find out your position. Certainly, I'd not bother communicating with the buyer, as they sound pretty unreasonable for not letting you off, and there is no point in dealing with unreasonable people! The worst thing that can happen is that you get some verbal abuse and then they will get banned from Ebay. If they are in another country, who gives a monkeys