Refund Gone Wrong - Goods & Services

[bizutch]

The buyer put the wrong address in his payment. I told him he would need to change the shipping address for me to have Buyer Protection.  He could not.
So I tried to CANCEL the transaction on my phone app.

Instead of cancelling the $1600 transaction, it left $1528 in my PayPal balance & attempted to WITHDRAW the funds from my checking account.
I put a Stop Payment on PayPal to prevent it. Then a "Chat" assistant told me to move the $1528 sitting in my PayPal account to my personal checking account to cover the draft so I wouldn't be broke.
NOW...my bank stopped payment on the draft. 
The withdrawal of the $1528 is in limbo. I have to check with my bank to learn if they block ALL PayPal transactions or only draft attempts.
A woman at PayPal in broken English was of no help. I learned only that they "may" attempt 3 drafts between 3-5 days apart.
I have no money in PayPal for them to refund the buyer.  I have a BLOCK on PayPal drafts from my checking account.
The $1600 should have been a refund to the buyer of my $1528 PayPal balance & the $72 PayPal transaction fee.
As it is, I would have to pay the PayPal fee out of my own money if I release the funds to PayPal.
The Customer Service Rep spoke such bad English.  I have NO idea how to fix this.   

I can't afford to forfeit MY money for his address error

[PayPal_Bindu]

Hello @bizutch,

Welcome to our community forum and thanks for posting here!

I certainly understand how concerning this can be for you. If you refund a goods & services payment, there are no fees to issue the refund, but the fees you originally paid as the seller to receive the payment are not returned to you. The amount of the refunded payment will be deducted from your PayPal balance. If your balance is not enough to cover the full refund amount, it will be debited from your linked bank account.

In this case, your best option would be to reaching our team to guide you with what next to done and help you accordingly. You can contact us by clicking the contact us option at the bottom of PayPal page or send us a message through our Twitter(@AskPayPal) and Facebook page for additional assistance.

I hope this helps, have a great day!

Bindu