I read through everything. You don't have a screenshot of him agreeing to accept $300 as repayment in full instead of $725?

A couple things here:

1. This looks like an extremely risky, somewhat shady business all the way around, and it seems like the only winner here is usually PayPal.

2. You have an online reputation at the forum and he doesn't, which definitely helps your case, but you haven't provided any evidence thus far that he agreed to take only $300 instead of $725.

Nothing else really matters here.

I don't know why he would ever accept a payment that wasn't F&F, but that's not the root of the issue: the root of the issue is you took $725 worth of BTC from him and only delivered $300.