Quick update on this so everyone is aware of the processes involved as a seller..

There is no update!
I have reported this to the ombudsman who then contacts Paypal.... Paypal have the reciept of delivery which includes a scan of the buyers signature and her full name.. they have done nothing with this evidence.
Ebay have been informed and suggest i go to the police.... and contact the buyer to resolve this.

Buyer HAS been contacted but refuses to answer.. Paypal  informed me via email that the matter will be escalated further and found IN THE BUYERS FAVOUR if... and get this.... " the buyer does not respond".

So bottom line is despite solid evidence that buyer has the item, unless they play ball and tell Paypal that they actually do have recieved it, they will get a full refund which i pay for and they get to keep the item../ which i can do nothing about.
I have even tried to leave negative feedback about the buyers scam and ive found im even blocked to leave ANY feedback for this person!

This is bullshit...