I gave them a call, and nothing could be done even though I said how clicking gift was accidental. Absolutely fucking pissed. The worst part is, they didn't have any way of me contacting them, providing evidence of the bullshit through the messages. It's like: "yeah we'll look at the account", but NOTHING beyond that. And what's worse is how he will CONTINUE to get away with this shit as long as he's up. PayPal just sees money and their fee, and lets the criminal walk. Disgraceful. And even worse, he's practically admitted the scam. Here's a recent chat log:
http://i.imgur.com/NTmf15S.pngI'm just sickened by people sometimes. I guess we all have to learn lessons the hard way, like the Bluth kids.
You made a mistake by saying it is accidental to choose gift. Should have said the truth - that seller asked you to, as he had problems accepting purchase payment. I have been scammed before by similar technique, and I have been honest throughout, and got my full payment back (lookup dayasinfo in the forum and my thread about that scammer).
Social engineering is at large in this forum. Be careful, and do not trust anyone other that the ones you trust

Hope you have become 100X wiser with this incident - it certainly was a revealing moment for me. However, your next steps:
1. Keep all records of conversation with scammer
2. If you used credit card, chargeback, or if you used bank transfer, reverse it
You will win this, as the scammer will have nothing to deliver you - at this point, you will probably have to mention your bitcoins were casascius, and thus tangible (if you have already mentioned bitcoin), otherwise just say you were expecting something tangible - like gold.