Ok just got off the phone. The girl I talked to was very nice, and she seemed to agree with my on the issue. She said it's not possible to change the decision, otherwise she probably would.
She said that once the buyer sends it back(they have 10 days), I have 3 days to inspect it and issue a refund, assuming it's in the same condition as I sent it. Obviously this is now a grey area, since I sent a new sealed item, and it's now used and possibly broken. It seemed like my only option is to wait and put in a claim that the item isn't in the condition I sent it in. That's kind of annoying considering I don't think the buyer even deserves to send it back to me, and it sounded like the Ebay Rep agreed, but I guess there's no reasonable fix to that...
I guess I'm somewhat hopeful, but who knows...