This enrages me beyond belief, both for the fact that you are going through this and the fact that Paypal's deficient policies could result in ANY of us going through the same exact thing at any time. I've said it a million times before and I will say it again- I hate paypal!!!!! They could be so great if they changed their policies and did their jobs, instead they keep making these blanket rules and keep all their investigations so opaque nobody can protect themselves from scammers.
Since this is an international and civil matter, I would pursue legal action against paypal instead of the buyer. The latter would be far too difficult and expensive. Since paypal is in the US and was the one who officially took your money from you after their "investigation" and had your $9k bag destroyed, they seem like the easier target. After you go after them, they will likely go after the scammer who took their money. I would search for a good attorney who would file a civil claim against paypal and only take payment on a percentage of the judgment. Let them look over paypal policy in general and show them how there might be grounds for class action suits against paypal for the practices. The possibility of windfall judgments in the future might make your particular case more enticing. I doubt this is the first time paypal has done something like this. You may even be able to find an attorney familiar with suing paypal or one who has a class action in the works.
Also, though this is really beside the main point of what's going on here, It might be helpful when presenting your case. Unless there's some sort of mathematical formula I am not familiar with on this one, I think your loss was $11k not $20k. You paid $9k for the bag and sold it for $11k, but you don't add the two together to calculate your loss because you wouldn't get her $11k PLUS the bag ($9k value), you would only get her money OR the bag. Since you got $11k for the bag and that was taken away from you, you lost $11k...kwim?