You sold a thing sight-unseen and the buyer isn't happy with it. Really who cares what the reason is, who is right or wrong, who is reasonable and who is too picky? We didn't have it in his hands when he paid, after he got it, he didn't want it. The refund is the right thing.
PayPal has a refund feature which is the ONLY way to refund this deal. After you get the cue back and inspect it and when you want to refund his money, go to your PayPal register, find his payment to you, click on "details" and on the page that loads there will be a place you can click for "refund" and on that page a box where you can change the amount to reflect your shipping settlement. PayPal will even credit you back the fees you paid when you received the funds and the buyer will receive the money you sent him with no fees deducted. No muss, no fuss, no expense, no problem. If the buyer later disputes the transaction, you are covered for the chargeback (although considering it was an International transaction I'm sure you didn't get the signature confirmation necessary for PayPal even if this transaction was shown as "eligible" for PayPal protection, so you probably were liable for a chargeback anyway if he disputes the transaction. If he was scamming you, he wouldn't need to return the cue, he could just file for non-delivery and you would be toast).
Get the cue back, give our buyer the money back, and sell the cue to someone who wants it.
Let me know if I can be of assistance.
Kevin