Long thread. Maybe I missed these.
‘Did the OP obtain the second buyers address from AG, or PayPal?
How did the OP verify that PayPal has the first buyers Washington address also listed on the second buyers PP account?
I wouldn’t send a refund to the second buyer. I’d look to AG and PayPal as corporations providing selling and payment services to hold up to their contractual obligations in this deal. They should know how and have resources to pursue any legal remedy. The OP and the second buyer working together will exert more pressure on them to resolve the issue.
‘If I bought something on eBay, and the seller followed the rules and sent it to the wrong but listed address, I wouldn’t look for the seller to resolve the issue. How could I expect them to know that the address they sent it to was wrong? Sellers on eBay never contact me to see if the address they see listed is correct.