[krn001]

That is what I was asking, how do I report something like this? He is breaking eBay rules by "Backing out of the transaction because buyers didn't place a high enough bid and the seller didn't add a reserve price" as taken from their rules and policies section. Where would I report that being that there isn't an option for a situation like this and you cannot type a reason for reporting an item.

You're correct in the buyer reneged on the sale as it is a binding contract. The same applies to a buyer who never pays, neither can be forced to ship or pay. I don't think there is an option to report that item & after posting a deserved neg f/b the seller probably has you on his BBL now.
Me personally, i don't think i would want to buy from someone doing what they did to you with the original sale.