After dealing with a difficult return myself as a seller there are a few things I've learned
If you had not chosen return for refund then you most likely would of won as "does not fit" is not an acceptable reason for a return and Ebay would of seen that from the messages. However since you did choose that, there is no point on trying to do otherwise now. If Ebay is forced to make a decision in this case, not only do you risk having a strike against you, but also there's a chance the buyer will get a refund and still be able to keep the pants.
Your advice is great. Thanks so much for putting that together. This is definitely a case of the bottom of the barrel buyer and you're right about the return policy.
I called Ebay CS again today using your advice and it went okay overall.
I've yet to receive the crops, however I checked her USPS tracking number and it states electronic information was received on 4/22. The rep told me I can either wait things out until she gets the crops returned back to me, or I can escalate the case. Like others mentioned, the rep explained that if I escalate the case I risk getting a strike on my account if I lose. The CS rep told me that I could challenge that and probably win she initially I offered the return to the buyer. That's a still a gamble though.