I would place the item back in the original damaged packaging and double box the whole thing in a larger, well-padded box. Plenty of photos and no opportunity for him to say it was not damaged on the way there (which hopefully PP knows by now).
Returning damaged item to seller....
I bought a Project Ground It which unfortunately was damaged during shipping. The seller refused refund even after sending multiple pictures of damaged item to him. Only after I initiated PayPal action did he decide to refund me. Through out this process he did not want the item back. Now he has decided he wants it back. I am willing to return it but he refuses to pay for return shipping costs. Am I correct in thinking he should pay return shipping fee? Thanks!