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Shipped via Paypal twice

Hi all,
I had shipped an Ebay item to my buyer using Paypal shipping w/DC. The item was returned to me as 'address unknown'. The buyer contacted me saying that his tracking number says on USPS.com that it was returned to me. I shipped it a 2nd time. I received it back again, same problem, on Wednesday Dec 5th. I contacted the buyer to let him know. He said it's BS and he threatened to file Ebay and Paypal claims. The address I sent to was Paypal confirmed.
What do I do? He refuses to pay for shipping again. I've lost most profit on the item already. Should I wait and let him file his claims? or can he even file an 'Item not received' claim since Paypal has the tracking info on file? I don't want any trouble or negative feedback, but I don't think I should be responsible for his 'unknown address'. I shipped to a Paypal confirmed address. Am I covered?
Thanks in advance for help!!

EDIT:
forgot to mention, it is sent via Priority mail...$4.60 each time I ship it.
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