If someone opens a dispute on Paypal how can the $ be accessed to ship the item if there is a hold? HELP!!?

Have you contacted PayPal about this? Usually they are good about trying to resolve problems. The comment about Paypal telling him to keep it open doesn't quite sound right. It appears you probably have someone on your hands that no matter what you do isn't going to be a happy camper. Once it a while you get people like that.