Not as though it will stop this guy from trying again, but the Ebay rep I am chatting with is canceling this guy's Ebay account.
I will post a new thread with everything I learned here to help others avoid this.
He send a fraudulent PayPal confirmation email.
His mistake, he sent it to my personal address. I get all paypal email at my work account.
He had previously requested my paypal email when requesting an invoice, but I have never given it out before so I knew that wasn't necessary. So he took a chance that I used the same email (or wouldn't notice).
I felt it was fishy from the beginning and my instincts were dead on.