Matthew,
Go forward with the eBay dispute. I would send it back! No collector considers that a mint condition knife. He may have his opinion, but he is wrong. Send it back registered mail, or whatever method leaves you with a written record of his receiving the knife. Then pray for him.
Most guys involved in this hobby of collecting knives are the salt of the earth - kind, straightforward and honest as the day is long. And you know, this guy may be alright, just wrong. Hell, I've been wrong.
But, DON'T GIVE UP. You paid for a mint knife (twice in my opinion) and received damaged goods. File the dispute. You're doing right.
Good luck.
Kevin