This whole exchange has been a "Charlie Foxtrot" from the beginning. IMO, what it boils down to is this:
Nirvanero has done nothing wrong, intentional or otherwise. I don't see how anyone could conclude otherwise. In the end, he did not get what he was wanting, which was a pristine, unused knife.
Benya did do something wrong, which may have been intentional, but nobody other than him knows for sure. Namely, at best, he may have failed to examine the blade closely enough to recognize it as something other than new and unused (BTW, I am talking about the sharpening part, not the spots on the blade. The spots could have appeared during shipment, but the knife certainly did not sharpen itself during shipment.). At worst, he intentionally attempted to cheat another person by selling a knife that he knew was not accurately described in his original FS post. Whichever of these possibilities someone believes, or if they believe something "in the middle", that is an individual choice for everyone who reads this. In the end, Benya did get what he wanted, at least in terms of his full asking price. I think it's fair to say that his reputation has also taken an unexpected, significantly large hit.
So, we come to this impasse with the above information. My suggestion for nirvanero is that you cut your losses and move on at this point. I believe there is nothing left for you to say that will alleviate your frustration and anxiety over this issue. Go out, treat yourself to something good, and try to put this whole thing out of your mind. If you can't do that, then the issue will continue to grate on you. For that, you will pay the price, not Benya. Ask yourself, "Is Benya worth all of this frustration that I have?" My guess is that he is not. This has been going on for quite some time and I just don't see anything good coming from it continuing. Life is too short to live it in frustration.
Benya, if you read this, you have shown yourself to be immature at best, and a strategizing, kniving thief at worst. You appear to have the power here--the power to ignore someone, the power to return the $ before the knife is returned (I see no evidence that nirvanero has been deceptive, but there is evidence that you may have been deceptive), and the power to be the bigger man here, to make the first move. Clearly, however, that power is little more than a mirage. It is not within you or you certainly would have exercised it by now. With that said, I hope you at least become more mature about how you handle adversity in the future. You certainly have some room to grow, as do most people, myself included. Hopefully you will at least try to make the most of it.