So what are you looking for opinions on?
You paid for the merchandise, and it arrived to you damaged. It doesn't matter whether it was damaged before or during shipment, it's the seller's responsibility to deliver the item to you in the condition it was stated at the time of sale. Even if there's a shipping insurance claim involved, it's there to protect the seller, not the buyer. You have the right to a full refund. If the transaction was done through paypal, then you will get the total, including shipping, refunded to you. Unfortunately, unless the seller decides to pay for return shipment on his own, you will be stuck with that cost, but maybe the possibility of getting a negative feedback for this will motivate him to be as accommodating as possible.