Ugh.. nasty situation. By bidding on the auction 
they agreed to pay for it - and to pay for 
shipping. So you need to ask them for the money 
like you've done. And if they don't - well 
then... you say "I'm sorry, but this payment 
isn't enough. Since you refuse to pay me the 
rest, I will send this by  which is covered by the amount you 
included."... and then refund them any money that 
they gave you that was excess over the cheaper 
shipping.

I mean, who does this person think they are? They 
bid. They won. They agree to pay for the item and 
for shipping. And now they want you to give them 
something for free? Obviously they don't realize 
that there's a reason why people sell stuff on 
auction. Its to MAKE money! It isn't like this is 
a FRIEND of yours winning the item and 
saying, "Hey man... I'll buy it, but can you help 
me out with the shipping cost a little?"... 
because if its a friend, you can be sure it'll 
come back to one day in one form or another. 

I swear. If worse comes to worse, I'd guess this 
is a violation of the auction thing... not paying 
the full amount, so you might even be able to 
drop the whole deal anyways and just refund the 
person all his money.