Agree. $300 is not a fair compensation for a damaged unit. It may or may not break down the line. It may or may not cost more than $300 to fix, but it will always worry you - and dont forget the knock on de-valuation if you want to sell down the line. You dont need the stress. The seller wants to settle with a $300 discount because he only insured for $100 - and if he takes it back he may well not be able to sell for $4500 inits current state, so hes still better of taking the $100 insurance from UPS (if they give it) plus giving you $300 back.
Simple - return the unit for a full refund. Do it via Paypal if necessary. The unit wasnt as described - in the fact it was missing the case you were promised (regardless of how that happened - the price agreed by you included the case), and was damaged in transit. Your entitled to a full refund and let the seller take the fall for being cheap with the insurance.