I am sorry to say that the reason why eBay cannot refund you your money because it has already been sent to the Seller's bank A/c.
Now, your only option is to contact your Seller directly and ask for a refund. Seller will ask you to agree with him for the feedback removal option. Once you do that, he will ask you to send the product back to him. Only then, he will refund you your money.
You made a mistake by giving him a negative feedback too early without giving him a chance to serve you with his after sales service.
If you would have agreed to the proposal to remove the negative feedback mutually, then he could have initiated the refund process from his side via eBay.
Now, this direct refund process involves a great deal of risk as your Seller may or may not keep his promise.