classic case of ebay not wanting to get involved.
sounds more like it didn't sell for what he wanted to me. you are correct though, it is a legally binding contract (allegedly) between buyer/seller, if it sells then you buy it - simple, so he should, without question complete the sale.
open a dispute with ebay against him - see what happens then.
similar thing happened when i was going to get my first disco, won the auction for about £250, got an email from the chap saying he had gone out in it "one last time" and stuffed the front end in.....needless to say i ended up not buying it, but only after agreeing with the seller that it was unfit for sale, and not what i wanted. he disappeared from ebay shortly after altogether.....