Also, if you do get stuck with this, I think I remember reading a while back that Apple will replace the back of an iPhone 4 for $30... You will need to check with Apple on that, as I may be incorrect, but if that is the case, it would be cheaper to send him $30 for him to buy a brand new back, then it would be for you to take the phone back.
Thought would be that if he where to have to ship you the phone back he would have around $10-$15 by the time he insures the package. So you would refund him $30 to get the phone fixed.
All in all, it seems like you are going to be stuck with this one, as from reading this it seams that he bought your phone, and then realized that not only did a new iPhone come out, but he could get a iPhone 4 for cheaper since there is a new 4S out. So he demands a refund saying that the phone is scratched.
I would do the following if it where me, even though I know that it wasn't scratched when he got it.
1. communicate only through the Ebay complaint channels, so you have a record of everything.
2. Check into the about if you can have apple replace your iPhone4 back.
3. Then contact him and give him his options. Offer A drop the case, as you know that it wasn't scratched.
4. Offer B is you give him $30 (or fill in the blank for the correct amount) for him to get the "scratched" back replaced.
If he resists then call Paypal, and you should have enough evidence then that he is trying to pull a fast one because he bought to soon without doing his research.
Anyhow, that is my 2 cents. Take it or leave it, but whatever you do, please only talk to him through Ebay resolution center, or Paypal resolution center so that you have a backup of everything he says. Odds are that he will slip up somehow, and you will end up looking clean in all this.
Good luck!