What to do when eBay buyer claims item is not as described?

I know this is a long drawn out story… I'm new to eBay and this is the first thing I have sold. I got the new iPhone and figured I would sell my old iPhone. It was in excellent condition (as I described), I had always had an otterbox or protective case on and everything was in total working order (I had used it that morning and put it up for sale that night). Someone bought it and had good feedback and I sent it the next day. It got there over a week ago and yesterday I received a message saying that "power button no work and scratches in middle frame. It no turn on. Why you no tell me?". I explained that the item was exactly how I described when shipped and he asked for $10 partial refund or full refund. He asked for me to send money then he will send phone. I called eBay and they told me to not give him money until I received it. I told him that and he opened a dispute case. I said I would do a $20 partial refund or full when I receive the phone. It has been well over a day and I have heard nothing. My money in PayPal was held and I don't know what to do. I think that I'm being "scammed" and taken advantage of. Help me figure out what to do next!

Added (1). How long until I contact eBay with my buyer not responding?

You have to issue a full refund after he ships item back. That is the only course of action.