People, what matters here is not the law of property but the principles of good neighorship. What is at stake here is a few hundred dollars and it's not worth bickering over with your neighbor.
Go to him and say, "Wally, I'm sorry that I painted the wall without consulting you. That was thoughtless and inconsiderate of me." Notice that all you have conceeded to here is thoughtlessness and inconsideration, but these have no monetary value; you have given nothing but you've appeased him quite a bit. Go on, "As a token of appology, I want to give you this 12-pack of your favorite beer." You called his wife to find out what kind. This is 12 bottles of beer; you're not giving up much... and he'll probably give you one back which is why you bring the beer ice-cold and have a church key in your pocket. Go on, "Now, Wally, what do you want me to do about the wall? I can repaint it a mutually-selected color. I brought the color chip brochure along with me. Or I can get it stripped back to bare?"
Then, a few months later after the whole thing has blown over, then get the survey done quietly.
If the survey shows the wall is on his side, say no more. If you still can't stand to look at the wall, plant some arborvitae on your side of the line.
And if the survey does show the wall on your side, then first speak to a real estate attorney. He will lay out some options to solve the problem. Solve it you must because once you know of it, you can actually end up loosing your land. When it comes time, approach your neighbor humbly. Don't mention the painting argument. Say, "Wally, my neighbor and friend, I was looking at refinancing my house and the bank insisted on a survey; they said that there are some problems in our area. They discovered that the retaining wall is actually on my property. At the bank's suggestion I spoke with an attorney, Hugh Lewy Dewy at Dewy, Cheatem, and Howe, he sketched out some options. I know you'll want to talk this over with your attorney. Here is a copy of the survey report and Mr. Dewy's suggestions. Why don't you and your charming bride come over for barbecue dinner next Saturday, sixish, and we can talk about this then?"