I'm gonna put in my two cents even though I know I should shut up....and PLEASE everyone note, I am NOT taking sides or blaming anyone. Okay, there's my disclaimer.
Now, I've never bought anything from the seller in question, but how can you get a refund without returning the products? Even if they were soiled, you wash them, and return them. That's what I would have done.
And Rena, I'm not an attorney, but I don't know if you should waste your time and energy on an attorney...oh yeah, and your money.
There will be a time in your life that people are not going to like your products, whether they are great or not. It's a person's perogotive not to like something. My mother is a GREAT eBayer and she gets people leaving her negatives and neutrals for no reason. If you stand behind your products, and many YTers have bought them, I think your rep will be okay.