Letter schmetter. Rescind the money and notify ebay of the fraud. You've given him MORE than enough leeway. He has now officially defrauded you and clearly does not have the merchandise to ship to you.

Think about it. Someone who lists something on ebay does so with one of two purposes:

1. To sell the item and hopefully make a profit.

2. To defraud people.

If he genuinely wanted to do #1, he would have shipped the item. It's not tough to put tape on a box and put it in the mail. The reason he hasn't shipped it is because he no longer has the item to ship, or never did in the first place. You are being duped, don't let him dupe you any more.