Neither side has a reputation for being a liar or a cheater. It's a he-said-she-said situation, and since Midori's books are the only place the transaction is recorded, and it's very easy to make a mistake. It's hard to rely on those books as definitive proof that he intended to pay with PayPal. Receipts, as others have said, would be the way to solve this problem in the future.
Silvrdrago ... probably the only proof you have of your purchase is to show the total cash amount that you had for AX and show every other receipt, and that the only unaccounted for money is the $350 that you spent at Midori's booth. If you can actually do this, you have about the same amount of proof as she has that you didn't pay.
I really don't think silvrdrago should feel obligated to pay anything additional in a compromise if he can prove that he's "short" $350. I know I would be furious if I bought and paid for some stuff from any seller, and later was asked to pay again, because the seller's books show that money is missing and it just happens to be my transaction amount. I think the transaction amount is significant only if it is an odd amount (like ohhh 310.21) or something like that. It's just way too easy to be short $350 from multiple smaller transactions than it is to be short an odd amount (though either is technically possible).
Honestly, I think the fairest solution here would be for both sides to chalk it up as lesson learned. As for blacklisting him or not ... that's up to Midori, but people should understand that neither side has an airtight case.
Just my two yen
