Carl, this is a tough one for sure and one that continually pops up in the hobby. Of course it's not your fault, but it's also not the fault of your buyer. It's the fault of the RM, but the question is who between you and your buyer should bear the risk that the RM doesn't do anything about it, which is likely. It tends to be a question of ethics, law, and frankly the community spirit.
The law - In the US (I know that doesn't apply to you folks, but it's what I know and it helps frame the issue even if it doesn't govern you), the question is whether a contract for sale is a "shipment contract" (i.e., FOB seller's delivery point) or a "destination contract" (i.e., FOB buyer's delivery point). Under the former, risk of loss passes from seller to buyer once the seller gets the item to the carrier. Under the latter, the risk of loss stays with the seller until the item is actually delivered at the buyer's door. Whether a contract of sale among the parties is a shipment or destination contract depends on intent. of course, where a buyer gives you his address, there is a strong presumption of a destination contract, in which case risk of loss stays with the seller until it is delivered at the buyer's door.
Ethics - this situation stinks. It stinks for both seller and buyer. No one is at fault. But looking at who is bearing what risk, the seller is often the one choosing how an item is packed and which carrier gets to deliver it. Given that the buyer has little control, except by paying and providing an address, ethics seem to lean on the side of the buyer as not having to bear the risk of loss or pursue the claim against the RM. The law follows that for the most part.
Community - We have a small, tight knit community, and people talk. If a seller in this situation was to claim no responsibility and tell the buyer he is on his own, that will likely follow the seller. It's just not the way to act in this community. At the same time, the buyer needs to recognize in this situation that the seller didn't do anything wrong. With the need to be good to each other in the community and caring about our reputations in mind, and thinking about what the law and ethics provide, reaching some compromise should be the goal. Maybe buyer and seller each split the cost of the item and go their separate ways. Or 60/40 or 70/30. Or whatever.
Good luck!