It doesn't matter if you are dealing with Ebay.com (USA), Ebay.UK, Ebay.CA or any other countries Ebay. They all say you are entering into a legally binding contract. That contract is between the buyer and the seller and Ebay has no way to compell the buyer to pay or the seller to sell.
Ebay can give a buyer a "non-paying bidder" strike or a seller a "non-performance" strike but that means little unless you get a number of these strikes. I challenge anyone to flat out tell me how many strikes it takes to be suspended but I guarantee you that one strike means nothing.
In this situation Paypal could freeze the seller's Paypal account if he refuses to sell and doesn't refund the buyer's payment. If the seller refunds the buyer's payment there is little recourse for the buyer through Paypal or Ebay. The buyer can give the seller negative feedback and nail his DSR ratings with all 1 out of 5's but that is it.
The bottom line on this situation is, the seller doesn't want to sell the sign and as long as he refunds the buyer's payment there is nothing Paypal or Ebay will do to force the matter. The buyer could live in Texas or Yorkshire, it doesn't matter, he isn't getting the sign and the seller will still be able to list as many items as his little evil heart desires.
Vlad