You definitely did the right thing. I would rather take a neg from the first seller than file a npb and have no choice but to sell the bag to a potential scammer if ebay forces them to pay.
Holy bananas! DO NOT SEND THE BAG TO THE BUYER! EVIL! NO!
Why don't you block international buyers on your auctions if you prefer to sell only to confirmed U.S. Paypal addresses, this is what I have done in the past. When you block them, they are unable to bid on your auctions. You are doing the right thing, follow your gut instincts, this feels like a scam to me also.