You earned the money dealing with a flaky buyer. Deposits are generally understood to be non-refundable.
Now you have to decide if $250 is worth dealing with all the bitching and moaning. Also, do not count on Paypal to do right by you. That money will probably be frozen for months. They are not looking out for your interests, only theirs.
At least you
did sell the car without issue the second time around
.
Jeff-