Nothing to do with op's problem but I looked at this seller's feedback. It says 100% but on the detailed feedback screen it qualifies this with being 100% for the last 12 months. Previous to that he had a neg and a neutral. No biggie in the wider scheme of things but misleading don't you think? I thought that 100% feedback meant from transactions since registration not just from the past year.
Good idea about emailing warning about a dispute. I think paypal expect you to have made contact and attempted to sort things. Although the seller warned about the hinge he/she was economical with the truth about the rest of the item. I'm surprised that someone wouldn't clean the thing first though. Yuk!
as far as I'm aware paypal holds bank/credit card details so they can usually process a refund even if the seller de-registers from ebay. Have you taken photos of the damage/dirt to send to the seller to show them how bad it is?