Help! Item lost / missing in Shipment to Germany, what next?

[mancavedweller2011]

I am a california based seller and sold a motorcycle front fender to a guy in Germany. 

I used the eBay platform to ship via USPS a motorcycle front fender to a guy in Germany. The fender was shipped within the proper ebay timeframe and via USPS first class. According to USPS tracking, the fender went missing after arriving in Frankfurt. That was the last scan, as the final destination was not Frankfurt.

The buyer opened a case against me on the German eBay sight, which is not in English and I had to use Google Translate on. There was no option to switch languages on either. The USPS could not give me an answer and I opened a case with them. So I just refunded his money. Shipping was ~$80 and the item sold for around $20.

Now, I am being told by eBay that this case counts against me, even though the tracking clearly shows that the item is lost.  The useless eBay rep I spoke to informed me that there is nothing I can do, it counts as a defect since I chose the shipping agent (even if it was through the eBay platform).

My questions:

1. How can I get this defect reversed against me, it is clearly not my fault USPS / German post lost the item

2. Can I recoup the shipping costs of the lost item?

Is there any other recourse for me on this? I feel terrible and want to do the right thing for the buyer.