Paypal, Inc. Pay Pal nerver refunded money after returning article to seller, Internet

 I purchased thru E-bay a diamond 1.29karat, K Color, and was not as described. I filed a dispute on 10/13/09and escalated to a claim in on 10/18/09 with Pay Pal, the company that handled the payment of the article thru Bank debit.  They wrote me an email requesting to return the article to the seller on the address provided by them for a full refund. I sent the article via USPS Priority Mail, Signature Confirmation. Before sending the article, I confirmed with Customer Service on 10/21/09 (C.C.)the address, since it was not the same address that came in the original package. He said to send it to the address Pay Pal instructed me. Article arrived at the Baltimore, MD postal office on 10/26/09 and after that to the Pikesville, MD postal office. On the same day a Notice was left to the recipient as well as on 10/27/09. The article was never picked up, neither signed for it. Today the package is nowhere, nobody knows of the whereabouts, I filed a claim with USPS and still pending information. Pay Pal, arbitrarily, denied our claim because the seller did not receive the article, so now, I dont have neither the article or the $431.01 which the promised to refund to me as soon as the article was delivered and assured me, that if the seller would not received the package, I will receive my refund and they will deduct the moneys from the seller's account. They only took my time, aggravated me with their lies, saying that the case will be resolved on 10/30, 11/06, 11/07 11/12, 11/14,11/24, 11/25, 11/27, 11/28, and finally on 11/30, they closed my claim, and never refunded the money.  The stone that was sold to me was a close to X quality next to carbon according to a specialist that appraised the stone for me. I think that the article was delivered but no signature was obtained or it was stolen from the USPS offices in Pikesville, MD as this was the office who handled the article.  On 11/30/09 I filed a complain with USPS Puerto Rico Customer Service Rep, to try to locate the item or get information to whom it was delivered.  I think this was a rip off from Pay Pal, which after instructing me to send the article to the seller for a refund they did not comply with they guarantee of 100% protection according to the Buyer Protection Agreement.