It was all going so well...!
First item listed and it has sold. However buyer didn't respond to the invoice. So sent a reminder, assuming forgot with Christmas etc. She has 142 feedback, 99.3%
She replied saying so sorry, totally forgot with Christmas, can only pay next (ie this) week. I agreed, as was well within 32 days of sale.
She has now contacted me saying that there is a problem with her eBay and paypal and it won't let her pay. She has contacted them, but as may take a little while to be sorted, she understands if I want to cancel the sale and relist. Notes that hopefully she would be able to bid again.
I have been charged the fees for the sale, so don't want to pay these unnecessarily. I feel bad just reporting her as a non-paying bidder (even though that's what's happening) as (I'm a soft touch) it seems harsh to give her a black mark on her eBay. 
Is there another way I can cancel the sale and not pay the fees, or should I just toughen up and report as non-payer?