Then ask for the receipts or serial numbers 
(which they all have).  In fact, he can claim the 
money orders were lost and get a refund.  So it's 
not like he lost his money (if he really sent it 
out in the first place).

As far as feedback, Ebay considers feedback 
separate from the non-payment refund process.  
It's really stupid but that's ebay.  So he still 
might be able to leave you some nasty feedback.  
You'd have to ask ebay to delete it (and wait for 
them to decide if it's warranted).  It's really a 
PITA but good luck!