This is why I would never do an online transaction from CL. I take it for what it is... basically newspaper ads on the internet. I've sold a few things on CL myself, $500 worth of xbox 360 video game equipment and a $3500 old sports car. In both cases people wanted to meet with cash in hand and see the product first. This is how it should be, in my opinion. I would never buy something over paypal on CL especially if I haven't seen it in person first. Sorry you had to go through all of this Pap, just remember these things for next time I suppose.
Another thing, just because this person has a paypal account, ebay account, and a business website does not mean it is a registered business that would be on the BBB. Anyone can buy webspace and post any website they want on it. Fake business or otherwise. Perfect example: I've been trying to get a computer repair/upgrade/designing company off the ground as side work to test the market locally. I've been in the works on getting a website made so that I can hand people business cards and them have a website to go to on it and get my standard pricing list for different services I provide. I do not have the money, however to have a registered business with insurance and all that yet. I know this isn't technically the right way to do things; but as I said I'm testing the waters through word of mouth right now and seeing how far I can take the business. This may be a similar situation.
Anyways, I hope all works out well for you Pap! Keep on her about it and I'm sure you'll get your money back.