What to do with people who back out deals

I don't know your conversations. But I'm betting there is the other side of the story also. I would point out, that in your statement alone.
they send you there Pay Pal then hours later
You seem to have taken your time "hours" to make the payment. Maybe, just maybe he felt like, within your conversations, you were going to make a more immediate payment. When you didn't. He sold it to someone else.

But, correct, not cool.