Sad story, Bob! I've given this advice before, but it bears repeating:
I've been working on and off for months collecting notes for a FAQ I eventually hope to write on "How to Buy & Sell Used Audio/Video Gear on the Net," but it's still in the process of being done. But I can give you some general purchasing tips:
1) unless you know and trust the person very well, DO NOT _EVER_ SEND THE SELLER CASH. Cash gives you no recourse in the event of fraud, theft, or even a disagreement (like when the merchandise arrives broken or damaged). (And when I say "Cash," that includes money orders, cashiers checks, or personal checks that they clear before shipping you merchandise.)
2) always try to use a charge-card for the purchase. That way, if there's a problem, you can make an appeal to the credit card company to have them refund your money.
3) consider using a third-party to act as an intermediary, like iEscrow, Tradesafe, or BuyersGuardian. They can inspect the merchandise, confirm that it is what the seller says it is, and also protect the seller from bad checks or stolen credit cards.
4) as a second resort, ask the seller to ship the merchandise to you via C.O.D. At least that way, you can see the package before paying for it. Of course, this will not protect you if somebody decides to send you a damaged product or a box full of bricks.
5) get a phone number from the seller so that you can talk to them and work out any problems by voice. Emails are often not enough in these situations.
6) if you do negotiate or communicate via Email, always answer Emails promptly.
7) the safest dealer to buy from is generally an established company with a brick-and-mortar store. At least this way, there's a physical building you could go to (or send an attorney to) to complain or, as a last resort, serve legal papers.
8) when dealing with an individual, ask for references. If they can provide the names and addresses of a half-dozen or more customers who have done business with him over the past few months, then that gives them a little credibility over someone who has zero references. Some may have "positive Ebay feedback," which in theory adds to their reputation. The only negative experiences I've ever had on Ebay were people with a rating of less than 10.
9) do a Deja News search on this person's name to see if there have been any negative reports on them over the past couple of years.
10) before making a big purchase (say, over $1000), ask on the various Usenet marketplace groups (rec.audio.marketplace, rec.video.marketplace, alt.home-theater.marketplace, rec.music.marketplace, etc.) if anyone has had any problems with this particular seller. Me personally, if it were my money and I was making a purchase this big, I'd take a cheap flight out to their town and pay for & pick up the thing in person.
In your case, if the person has totally ducked out of sight, about all you can do is file a small-claims lawsuit against them in their state; there's little remedy if you file the suit in your home town. (Because of the large number of similar disputes, some small-claims courts will now only take cases involving more than $2000.) You can pay a process server to serve the seller with court papers. The problem here is, even if you win, there's no easy way to collect, because a judgement is just a piece of paper. You could also consult your local post office and your state Attorney General's office and file complaints against the person. Most states have a Consumer Affairs Department, and you can call them to find out your specific rights. If the seller is a company, then you can file a complaint with their city's Better Business Bureau, in addition to the above remedies.
You could conceivably post a "Deadbeat Alert" message to rec.audio.pro and rec.audio.marketplace, warning other customers to avoid dealing with this person. However, make sure that you do so only after giving them every opportunity to communicate and solve the problem after a reasonable amount of time, and be careful to state the facts and avoid libeling them.
I've only had to do this once, in more than a decade of buying and selling gear on the Net (and on CompuServe during the 1980s). That bizarre experience was enought to inspire me to write the FAQ, and eventually when I have more time, I'll finish it and post it here.
If anybody has any tips you'd like me to include, let me know via E-mail and I'll add them to the list.